The inclusion of government bonds in the JP Morgan emerging market government bond index (GBI-EM) will lead to a new layer of demand for government securities, resulting in lower borrowing costs for the government, says Rajeev Radhakrishnan, chief investment officer (fixed income), SBI Mutual Fund. In an interview on the phone with Abhishek Kumar, Radhakrishnan highlights that g-sec papers under the fully accessible route (FAR) will see higher demand over the non-FAR g-secs of the same duration. Edited excerpts:
Did the bond inclusion come as a surprise for the markets?
It was expected. The markets were aware that during the latest round of consultation between index providers and investors, a larger set of investors favoured India’s inclusion. This is the