'Govt enhancing limits for FII investment in debt segment'

Written by PTI | New Delhi | Updated: Aug 20 2013, 23:43pm hrs
The government has been enhancing quantitative limits for FII investments in debt segment, including government securities (G-Secs) to help develop rupee debt markets, Parliament was informed on Tuesday.

To augment foreign portfolio investment inflows by improving investment appetite for long term and other offshore investors, the investment limits for offshore investors in government securities has been enhanced by $5 billion to total limit of $30 billion, Minister of State for Finance Namo Narain Meena said in a written reply in Lok Sabha.

The enhanced limit of $5 billion has been earmarked to FIIs registered with Sebi as Sovereign Wealth Funds, multilateral agencies, endowment funds, insurance funds, pension funds and foreign central banks, he added.

"It is expected that aforesaid measures would help mobilising greater foreign investment in rupee denominated debt instrument and to help develop rupee debt markets," Meena said.

He said the government, in consultation with RBI and Sebi, has been progressively enhancing the quantitative limits for FII investments in various debt categories, including G-Secs keeping in view the evolving macroeconomic situation, debt liability and foreign exchange reserves position in India.

FIIs play an important role in providing liquidity to the G-Sec market.