A series of measures from the central bank to lure foreign buyers into the country’s short-term debt market could easily backfire, investors fear, exposing the economy to volatile “hot money” flows. The Reserve Bank of India lifted (RBI) a restriction limiting foreign investors to buying bonds with three years or more to maturity and also gave them access to short-term sovereign treasury bills. The new rules have stoked fears of an influx of “bond tourists” and the associated rapid-fire switching in and out of short-term debt by foreign traders.

(The Hindu)