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Treasury Storm May Hit India, Indonesia’s Bonds Less Than Others

  • Wider spread over Treasuries to shield rupee, rupiah debt: BNP
  • High-yielding rupee, rupiah bonds ourperform Asian peers in 3Q
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Sovereign bonds from India and Indonesia are seen better placed to weather the impact of rising U.S. yields thanks to their wider rate differential over Treasuries.  

Bonds from the two countries are already leading gains in emerging Asia this quarter, offering 3%-5% returns to dollar-based investors. In comparison, lower-yielding bonds from Thailand and South Korea have handed losses of between 4.5-5%.