International Finance Corp, the World Bank’s investment arm, plans to sell a record US$1 billion worth of rupee bonds offshore to fund its investments as India struggles to lure capital amid the slowest growth in a decade.
The bond sale aims to “strengthen India’s capital markets and attract greater foreign investment in a time of renewed economic uncertainty across the world,” the Washington-based IFC said in a statement yesterday.
India’s rupee has weakened 11% this year, the worst performance in Asia’s emerging economies after the Indonesian rupiah, as its widening current-account deficit makes it more reliant on foreign capital for funding. Foreign investors have cut their holdings of Indian bonds to $25.9 billion as of Oct 8, the lowest since December 2011, official data show.
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