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Currency Turmoil Risks Undermining India’s Debut Green Bond

  • Nation aims to issue rupee-denominated security in second half
  • RBI hikes will cut appeal of India’s bond sales: Lombard Odier

India is likely to face an uphill battle if it goes ahead with its first sovereign green bond sale as it aims to issue the securities in rupees, putting off most overseas investors.

Political opposition to borrowing in dollars means the nation will have to largely forsake the global funds that have boosted ethical debt into a $4 trillion market, and rely on local buyers. The absence of Indian ESG funds means the government will be hoping the same banks, insurers and asset managers that it will tap for its record borrowing this year will have enough appetite left over for its green bonds.