RBI sells Rs 34 Billion Indian Bonds as Index Inclusion Boosts Inflows

Current Context: The Reserve Bank of India (RBI) recently sold ₹34 billion ($406 million) worth of bonds in the secondary market.

• This move is likely aimed at absorbing excess cash in the banking system due to inflows into the nation’s debt after its inclusion in a global index.
• The inclusion of India’s bonds in JPMorgan Chase & Co.’s flagship emerging market bond index has attracted foreign investments, resulting in increased local rupee liquidity and a boost to reserves.
• India became the 25th market to be included in the index since its inception in June 2005, with expectations of global inflows of $20 billion to $25 billion into the Indian bond market.

Question:

1 What amount of bonds did the Reserve Bank of India (RBI) recently sell in the secondary market?

• A) 24 billion
• B) 34 billion
• C) 44 billion
• D) 54 billion

Answer: B) The Reserve Bank of India (RBI) recently sold ₹34 billion ($406 million) worth of bonds in the secondary market.