Sovereign bonds & credit ratings

At the end June 2019, the RBI's foreign exchange (FX) reserves amounted to about $422 billion. This is around 15 per cent of GDP way below the 26 per cent of GDP level of FX reserves in 2007-08

The announcement in the latest Budget of the central government’s intention to borrow $10 billion from international capital markets through sovereign bonds was a startling revelation. Such off-shore bond issuance would purportedly be in lieu of domestic borrowings. To that extent it would lead to less crowding out of non-government borrowers from domestic financial markets. A number of commentaries have appeared in the media including one on July 26 indicating that perhaps the Prime Minister’s Office is opposed to this Ministry of Finance (MoF) proposal to issue sovereign hard currency bonds.  

According to some media reports, it was lobbying by investment