So far, because of non-convertibility of the Rupee on the capital account, we had been averse to the idea of Rupee-denominated bonds in overseas markets. Such an instrument, to replicate a Rupee-pay-off, will need an onshore Indian asset and further, the investor will require access to the onshore derivative market to hedge her currency risk. Both of these were restricted.
Over the past year, the ECB money market operations have effectively contributed to containing risks to the euro area’s financial stability without changing the stance of monetary policy – as defined by the key ECB interest rates – which remained firmly geared towards the price stability objective.