The government believes it has a compelling argument for a foreign currency-denominated sovereign bond issue. Yields on the 10-year government bond have already tumbled to 6.33 per cent, the lowest since demonetization. The rupee could weaken considerably from current levels which could see repayment costs shoot when the bonds mature. The government is looking to raise 10 per cent of its borrowings from the sovereign bond. A flotation of $4 billion sovereign bond as a first tranche may seem modest but it could whip up more trouble than it seeks to alleviate.

Source: The Telegraph July 18, 2019 03:33 UTC