Foreign investment limit in govt debt hiked by $5 billion - Indian Express

ENS Economic Bureau : New Delhi, Thu Jun 13 2013, 03:26 hrs In a strong measure aimed at defending the rupee, the Centre on Wednesday announced a hike in the foreign investment limits in government debt by $5 billion. The measure aims at reversing the outflow of FII funds from debt instruments, one of the reasons for the depreciation in the rupee in recent weeks. Currently, the government debt limit stands at $25 billion, of which 75 per cent is estimated to have been used up so far. The move comes a day after the Chief Economic Advisor to the finance ministry Raghuram Rajan had said the government will be announcing measures to ensure that portfolio investor inflows are enabled and encouraged. The Sebi, in a circular issued today, said that the enhanced limit of $5 billion shall be available for investments only to those FIIs that are registered with the market regulator under the categories of sovereign wealth funds, multilateral agencies, endowment funds, insurance funds, pension funds and foreign central banks. "To begin with, the amount of $5 billion together with the unutilised limit of Rs 29,812 crore as on May 31, 2013 (due for auction on June 20) will be made immediately available for investment on tap by these investors... The amount not utilised as on June 18 (out of the current unutilised limit of Rs 29,812 crore) will be put on auction on June 20. Similar exercise shall continue every month," Sebi said in a statement. Analysts said the move is positive on sentiment and in the medium term, this should result in FII flow into Indian debt, even if that does not happen immediately. Also, the expectation is that these inflows would be more long term in nature, they said. While almost all of the $25 billion limit for foreigners in government debt has been exhausted, just around half of the corporate debt limit of $51 billion has been used so far, as per Sebi data until end of April. ... contd. ALSO READ Facebook introduces hashtags At Electronic Entertainment Expo, Sony returns with 'Final Fantasy' video game Weeks after William S Pinckney's arrest, Amway India invests Rs 400 cr, to create 475 jobs Apple Inc. iOS system update: Mapping change for users Please read our terms of use before posting comments TERMS OF USE: The views, opinions and comments posted are your, and are not endorsed by this website. You shall be solely responsible for the comment posted here. The website reserves the right to delete, reject, or otherwise remove any views, opinions and comments posted or part thereof. You shall ensure that the comment is not inflammatory, abusive, derogatory, defamatory &/or obscene, or contain pornographic matter and/or does not constitute hate mail, or violate privacy of any person (s) or breach confidentiality or otherwise is illegal, immoral or contrary to public policy. Nor should it contain anything infringing copyright &/or intellectual property rights of any person(s). via Business - Google News http://news.google.com/news/url?sa=t&fd=R&usg=AFQjCNF6iZqNMer9K0aVtw_XvKlgZNKrDg&url=http://www.indianexpress.com/news/foreign-investment-limit-in-govt-debt-hiked-by--5-billion/1128493/

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