How the global bond sell-off could affect India | Explained

The story to date: Economies the world over are going through a brand new downside: traders promoting their authorities bond holdings. This might have severe implications for the long run borrowing plans of governments, together with India’s. It additionally doubtlessly has knock-on results on the price of borrowing for the non-public sector and the degrees of personal sector funding within the economic system.

A bond is nothing greater than a contract of types between a borrower (the issuer of the bond) and the lender (the purchaser of the bond). It’s mainly an settlement that the purchaser will lend cash to the bond issuer with the promise that will probably be repaid with curiosity over a set time period.