Masala Bonds are rupee-denominated bonds issued outside India by Indian entities (typically corporates). The term "Masala Bonds" was coined by the International Finance Corporation (IFC), the investment arm of the World Bank. These bonds expose investors to the currency risk (INR depreciation), while allowing Indian issuers to avoid this risk, as they raise funds in their domestic currency.
The financial instrument, through which Indian companies can raise money from overseas market in Rupees, is known as
Asked in UKPSC CS Prelims 2016 · Topic: External Commercial Borrowings (ECB) (Currency of Borrowing: Foreign Currency ECB vs. Rupee Denominated ECB (Masala Bonds))
More External Sector of Economy questions
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