India’s government plans to meet as many as eight bankers as it weighs selling debt abroad to raise dollars and help steady the rupee, according to two Finance Ministry officials with direct knowledge of the matter.
The meeting as soon as today is a brainstorming session to assess the feasibility of such sales, the officials said, asking not to be identified as the move is confidential. Raghuram Rajan, the ministry’s top adviser, will chair the gathering, and Barclays Plc, Deutsche Bank AG and Bank of America Corp. will be among those present, the officials said.
Any issuance of sovereign dollar bonds for overseas investors would be the first in the nation’s history, while the country in 1998 and at the turn of the millennium sold foreign-currency debt to non-resident Indians. The rupee was the world’s worst performer against the dollar last month and touched an all-time low July 8, fueling concern India needs higher reserves to stabilize it.
“Issuance of foreign currency-denominated offshore bonds, likely targeting the Indian diaspora, is the most potent near-term policy option,” to arrest the rupee’s slide, analysts at Barclays, including Singapore-based Hamish Pepper, wrote in a report. The company said such a bond or deposit step could raise $15 billion to $20 billion.
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