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India’s trillion-dollar bond market braces for foreign capital boost

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India’s sovereign bond market, valued at a trillion dollars, is set to witness a significant inflow of foreign capital. This development comes in the wake of JPMorgan Chase & Co. (NYSE:)’s decision to incorporate Indian debt into its emerging market indices.

The multinational banking corporation disclosed this strategic move last week, assigning a maximum weightage of 10% to India in its primary emerging market index. The inclusion process will begin progressively from June 2024.

Financial forecasts predict that this decision by JPMorgan could attract over $20 billion in inflows. This substantial influx of new capital is expected to alleviate concerns about fund availability within the bond market and provide a boost to the Indian Rupee.

The impending foreign capital is anticipated to play a crucial role in stabilizing the supply-demand dynamics within the bond market and offer robust support to India’s currency. The move by JPMorgan is therefore expected to have a significant impact on the strength of India’s bond market and its national currency.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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