Why yeld curve important? what does it signify the hindu?
Answers
The recent furore over the magnitude of frauds at public sector banks has added to the pile of non-performing assets the banking sector is saddled with. Big-ticket welfare programmes like the National Health Protection Scheme – dubbed Modicare – and the ambitious plan to double farmers' incomes by increasing the minimum support price to 1.5 times the cost of production were announced with much fanfare in the Budget speech. But if the system is not flush with funds for these schemes, the government has to go into debt; and that has a bearing on the economy.
Economists keep an eye out for the numbers coming out of the bond market. So do policy makers, mutual fund managers, and traders in equities and commodities. Government securities or bonds, may not directly affect one's personal finances, but the yield curve can be telling on the direction in which a country's economy is headed.
In November 2017, the international rating agency Moody’s upgraded India’s sovereign bond rating to Baa2 from Baa3 with a stable outlook. However, it also warned about high debt. Here is all you need to know about debt instruments and how they influence the economy.
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