New Delhi: Morgan Stanley expects India to be included in the Global Bond (GBIS) index in early 2022 and projects that the index inclusion will draw the flow of bond currents of $ 170-250 billion in the next decade in the basebull scenario.
“This will have great implications for the economy, FX, bond yields and equity markets,” he said in a report on Wednesday.
It is said that foreign ownership of Indian government bonds (IGBS) has declined but 2022 will be a turning point that can bring the acceleration of bonds.
“The GBI-EM and the global aggregate index tend to include India in early 2022.
We expect the OneOff index of $ 40 billion in 2022-23, followed by an annual inflow of $ 18.5 billion in the next decade, encouraging foreign ownership of up to 9% In 2031, “said the report.
It is said that the opening indicates the desire of policy makers to encourage higher growth rates through investment.
This will drive the balance of Indian payments into the structural surplus zone, indirectly creating an environment for lower capital costs and ultimately positive for growth, the report said.