Speed Bump for Indian Money Funds
Bloomberg writes "Moody's Unit Sees Caution in India Money Market on IL&FS Default." The story says, "A rare default in India's corporate debt market may prompt households to scrutinize the fine print on money-market funds, which have grown in popularity over lower-yielding bank savings accounts as inflation concerns spread. IL&FS Financial Services, a unit of a infrastructure finance firm that helped fund India's longest tunnel, last month missed a payment on its short-term borrowings, according to a filing. While it settled the obligations in full within days, the default triggered a central bank rule that bans delinquent issuers from the commercial paper market for six months." It adds, "The episode is a reminder that money-market funds that invest in short-term instruments aren’t completely risk free, according to the Indian unit of Moody's Investors Service. Such funds account for about a fifth of the 23 trillion rupees ($320 billion) of industry assets, up from 15 percent four years ago, data from the Association of Mutual Funds in India show." (For more on money market funds in India, see these Crane Data News (or Link of the Day) stories: "New Sundaram Indian Money Fund (5/9/18)," "Paytm may launch Indian money fund (1/1/18)," and "Worldwide Money Fund Assets: Chinese MFs Jump Again, US Drops in Q1 (7/3/18).")
