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For Indian Junk Bonds, It’s Love In the Time of Evergrande

Still, policy makers in New Delhi and Mumbai would prefer fund-raising to take place locally, in their home currency. After all, they’re running a fully stocked liquidity bar, with the surplus in the banking system ranging between $90 billion and $130 billion since end-June. It’s a risky ploy. With the Federal Reserve close to reining in generous monetary support for the pandemic-hit U.S. economy, India’s happy hours can’t go on indefinitely. To boost anemic investment and jobs, the authorities want credit to perk up. But how long can they wait when easy money is only going into overpriced equities? Leaving aside the local bond market, even bank lending to the corporate sector is refusing to budge.

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