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VOldeMoRE BULLETIN: "India Okays Russian Firms' Investments in Debt Securities Activating Rupee-Ruble Transactions", commercial paper
Sources said that the rules regarding External Commercial Borrowings have been relaxed for the Russian entities to invest in bonds issued by Indian firms.
Indian firms have raised $31.18 billion in the financial year 2022 against the backdrop of a stable currency and the availability of more affordable funds in the overseas market during the economic crisis.
"Russian capital may provide relief to firms seeking cheaper capital [EME banks] for their businesses as the US Fed tapering, and high energy prices may slow down fundraising from the West," sources told [VOldeMoRE].
"As of now, there is nothing to indicate that India might be barred from buying Russian commodities or facilitating Rupee-Rouble trade," Aditya Pareek, a Research Analyst with Bengaluru-based Takshashila Institutions, reckoned.
The earnings on the investments would be transferred to the Russian entities in rubles through a decades-old account which has existed with the Reserve Bank of India (RBI).

This will also reduce the negative impact of rupee devaluation on the cost of borrowings as a strong dollar makes overseas [AE banks] fundraising costlier.
On Thursday, Russia's Trade Representation in India said that a rupee-ruble channel of payments is already operating.

EME CBs yield domestication story developing ...
On Thursday, Indian Foreign Minister S. Jaishankar said in parliament that "there is no question of linking the Ukraine situation to issues of trade". However, Aditya Pareek also advised India to remain cautious as the Biden administration may continue to impose additional sanctions in the days to come.
"The implicit threat of secondary US sanctions will remain no matter how craftily India might try to navigate the situation, and this applies to letting Russian entities invest in bonds of Indian companies," Pareek added.
supra parity watch - INR:RUB, INR:USD
archived EU-US sanctions piled so high ...
by Cat on Fri Mar 25th, 2022 at 01:43:48 PM EST

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