The peg also allows financial institutions such as our large pension funds to invest substantial parts of their portfolios in euro assets without worrying about exchange rate risks. This also implies that once a credible regime is in place, there are potentially substantial costs associated with switching from one regime to another.
The two institutions constituted Technical Committee to oversee the automation of trading of Treasury bonds through the NSE. The main objective of this initiative was to make bonds trading secure, efficient and a vibrant market. The expected improvement in market activity will also improve market liquidity and encourage more investors to participate in the bond market.