ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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India’s Inclusion in the JP Morgan GBI-EM Indices

A Path to Eden or Just Another Sin?

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The concept of “original sin” was introduced by Eichengreen and Hausmann (1999), defining it as “a situation in which the domestic currency cannot be used to borrow abroad or to borrow long term, even domestically.” Subsequently, Eichengreen et al (2003) redefined the concept as a country’s inability to borrow abroad in its own currency, suggesting the term “domestic original sin” for the country’s inability to borrow in its own currency long-term domestically. We adopt the Eichengreen et al (2003) definition of original sin.

Armed with this information, let us now delve into India’s inclusion in JP Morgan’s Government Bond Index-Emerging Markets (GBI-EM) of local currency government bonds (LCGBs) and note that JP Morgan offers six distinct related indices. They are GBI-EM, GBI-EM Broad, GBI-EM Global, and their diversified counterparts, each varying in the countries included and the assigned weights.

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Updated On : 27th Nov, 2023
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