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2025-10-28 18:21:15
Foreign holdings of Indian government bonds hit a record high, driven by diversification needs and expectations of rate cuts. ⑴ Foreign holdings of Indian government bonds exceeded a record high of 3.11 trillion rupees (approximately US$35.35 billion), accounting for 6.8% of all issuance, with fully accessible bonds becoming the primary investment target. ⑵ The inclusion of Indian bonds in the three major international indices, coupled with a weak US dollar and demand for local debt in emerging markets, is driving global capital to seek diversification. ⑶ The Reserve Bank of India has cut interest rates by 100 basis points this year and signaled further easing, with the market generally expecting another 25 basis point cut in December. Low inflation and dovish guidance create a favorable environment. ⑷ The central bank's single-day sales of US$5 billion this month to defend the rupee have boosted foreign investor confidence, with political stability and progress in trade negotiations contributing to its appeal.
