Bond purchases hit record $16.67 billion

Written by fe Bureau | Mumbai | Updated: Aug 26 2014, 10:19am hrs
With foreign institutional investors (FIIs) having bought bonds of $287 million on August 22, total bond

purchases, so far in 2014, have hit $16.67 billion, surpassing the earlier record of $10.05 billion in 2010.

On Wednesday, investment bank JPMorgan bought securities of $2.4 billion, pushing the foreign holding in bonds to over $16 billion, Bloomberg news reported citing sources.

Bloomberg news also reported that JPMorgan's deals were executed across different maturities in the post-noon session, citing CCIL data. CCIL is the Reserve Bank of Indias trading platform for government bonds.

FIIs have bought 99.23% of the available $25 billion in government bonds as on August 25, according to data published by the National Securities Depository on Monday.

Currently, R1,23,474 crore of government bonds have been purchased and only R958 crore remain under the $25-billion limit, according to the data.

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The benchmark bond yield ended at 8.56% on Monday's close.

The Reserve Bank of India (RBI) in July increased the limit available for FIIs by $5 billion to $25 billion but kept the overall limit intact by lowering the limits for long-term foreign investors such as sovereign wealth funds.

The central bank simultaneously elongated the duration of investments for FIIs to a minimum residual maturity although it refrained from imposing any lock in.