Indian regulations limit offshore rupee bonds

Author: Ashley Lee | Published: 5 Mar 2014
  • The IFC has issued nearly $500 million from its $1 billion offshore rupee bond programme
  • The bonds are linked to the rupee but settled and cleared in US dollars;
  • Local restrictions on foreign investors raising leverage in thedomestic market limit the potential of offshore rupee bonds

The International Finance Corporation (IFC) has issued nearly $500 million in offshore rupee bonds. But domestic regulations continue to restrict the market’s development.

IFC’s $1 billion offshore rupee-linked bond programme allows international investors to buy rupee-denominated products without going through India’s regulatory process.

India’s regulators have prioritised developing both onshore and offshore rupee bond markets following last year’s rupee volatility,...