Developing India's Offshore Local Currency Bond Market: Lessons from Emerging Countries
Kohli, Renu; Sahoo, Pravakar; Khan, M. Shuheb | August 2017
Abstract
After the 2008 financial crisis, macroeconomic positions and growth prospects weakened in the advanced economies; emerging market economies (EMEs) improved however. Offshore, local-currency bonds of EMEs became popular as result, with many EMEs exploiting the opportunity. India also launched its rupee-denominated bond (masala bond) abroad in 2013, seeking to cultivate this channel for domestic infrastructure financing, while mitigating currency risks. Although still nascent, masala bonds have generated tremendous interest amongst issuers and investors. Market growth and development is challenged though by several issues, notably lacking liquidity and depth. This paper takes stock. It assesses the current market state and structure, surveys a cross-section of market participants to identify the relevant issues, and employs two case studies of EME peers, China and Brazil, to learn from their respective paths and experiences in similar regard. The paper concludes by listing the key essentials for future growth and long-term sustainability of the masala bond market and its emergence as a viable avenue for infrastructure financing.
Citation
Kohli, Renu; Sahoo, Pravakar; Khan, M. Shuheb. 2017. Developing India's Offshore Local Currency Bond Market: Lessons from Emerging Countries. © Indian Council for Research on International Economic Relations. http://hdl.handle.net/11540/7444.Keywords
Public Accounting
Business Financing
Subsidies
Social Equity
Economic Equity
Project Risks
Project Impact
Public Administration
Corporations
Taxation
Public Debt
Local Government
Debt Management
Taxation
Public Accounting
National Budget
Municipal Bonds
Local Government
Local Taxes
International Monetary Relations
International Financial Market
International Banking
Central Banks
Business Financing
Financial Aspects
Fiscal Policy
Regional Development Finance
Public Scrutiny of City Finances
Non-Bank Financial Institutions
Local Government Finance
Government Financial Institutions
Foreign and Domestic Financing
Financial Risk Management
Assessing Corporate Governance
Good Governance
Governance Approach
Urban Development Finance
Trade Finance
Small Business Finance
Rural Finance
Roundtable on International Trade and Finance
Regional Development Finance
Investment Requirements
Banks
|Taxing power
Tax administration and procedure
Tax policy
Effect of taxation on labor supply
Decentralization in government
Community power
Corporate divestment
Civil government
Delegation of powers
Equality
Neighborhood government
Subnational governments
Delivery of government services
Local taxation
Options
Government
Local government
Taxation
Grants
Loans
Use tax
Taxing power
State of taxation
Tax-sales
Tax revenue estimating
Tax planning
Spendings tax
Special assessments
Tax administration and procedure
Sales tax
Real property and taxation
Progressive taxation
Effect of taxation on land use
Effect of taxation on labor supply
Intergovernmental tax relations
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