
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:JPM)'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.
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