IDEAS home Printed from https://ideas.repec.org/p/npf/wpaper/13-126.html
   My bibliography  Save this paper

Foreign investment in the Indian Government bond market

Author

Listed:
  • Patnaik, Ila

    () (National Institute of Public Finance and Policy)

  • Malik, Sarat

    (Securities and Exchange Board of India)

  • Pandey, Radhika

    (National Institute of Public Finance and Policy)

  • Prateek

    (Securities and Exchange Board of India)

Abstract

A country witnesses currency exposure when locals hold a large amount of unhedged foreign currency denominated debt. However, India's capital controls continue to be guided by concerns about debt and its maturity, rather than its currency denomination. Even though the there is foreign appetite for rupee denominated debt, India has placed many restrictions on foreign investment in rupee denominated bonds. These include caps on the total as well as limits by investor class, maturity and issuer and have been implemented through a complicated mechanism for allocation and reinvestment. This paper presents the logic and rationale for why these restrictions fail to meet the objec- tives of economic policy today. It recommends removal of quantative restrictions on foreign holding of Indian rupee denominated debt and suggests ways to move to a more efficient framework.

Suggested Citation

  • Patnaik, Ila & Malik, Sarat & Pandey, Radhika & Prateek, 2013. "Foreign investment in the Indian Government bond market," Working Papers 13/126, National Institute of Public Finance and Policy.
  • Handle: RePEc:npf:wpaper:13/126
    Note: Working Paper 126, 2013
    as

    Download full text from publisher

    File URL: http://www.nipfp.org.in/media/medialibrary/2013/09/WP_2013_126.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. repec:cuf:journl:y:2018:v:19:i:1:magud:reinhart:rogoff is not listed on IDEAS
    2. Patnaik, Ila & Shah, Ajay, 2011. "Did the Indian capital controls work as a tool of macroeconomic policy?," Working Papers 11/87, National Institute of Public Finance and Policy.
    3. Nicolas Magud & Carmen Reinhart & Kenneth Rogoff, 2005. "Capital Controls: Myth and Reality A Portfolio Balance Approach to Capital Controls," University of Oregon Economics Department Working Papers 2006-10, University of Oregon Economics Department.
    4. Chikako Baba & Annamaria Kokenyne, 2011. "Effectiveness of Capital Controls in Selected Emerging Markets in the 2000's," IMF Working Papers 11/281, International Monetary Fund.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Rakesh Mohan & Muneesh Kapur, 2015. "Pressing the Indian Growth Accelerator; Policy Imperatives," IMF Working Papers 15/53, International Monetary Fund.
    2. Renaldi, R. & Kiprakis, A. & Friedrich, D., 2017. "An optimisation framework for thermal energy storage integration in a residential heat pump heating system," Applied Energy, Elsevier, vol. 186(P3), pages 520-529.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:npf:wpaper:13/126. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (S.Siva Chidambaram) or (Joanne Lustig). General contact details of provider: http://www.nipfp.org.in .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.