Economist

Richard Iley

Macroeconomics

Urjit Patel's RBI has had a busy few weeks with the initiation of action against the 12 biggest loan defaulters following shortly after the second bi-monthly Monetary Policy Review the previous week. A less-heralded development has been RBI's decision to tighten dramatically the regulations surrounding the nascent Masala bond market (INR bonds issued offshore), clipping its wings just as it was starting to soar. <a href="https://rbi.org.in/Scripts/NotificationUser.aspx?Id=10994&amp;Mode=0" target="_blank">The regulatory tightening dictates tenors and caps yields</a> in a Draconian move that…

Urjit Patel's RBI has had a busy few weeks with the initiation of action against the 12 biggest loan defaulters following shortly after the second bi-monthly Monetary Policy Review the previous week. A less-heralded development has been RBI's decision to tighten dramatically the regulations surrounding the nascent Masala bond market (INR bonds issued offshore), clipping its wings just as it was starting to soar. The regulatory tightening dictates tenors and caps yields in a Draconian move that…

RBI: Masala Mis-Step