FII bond limit raised by $10 bn to $75 bn
“The hiked limits will help the government in its borrowing. It is a positive for the bond yields," said A Prasanna, chief economist at ICICI Securities Primary Dealership.
The finance ministry has already moved the fiscal deficit target to 5.3% from the budgeted 5.1%, but analysts are doubtful of meeting the revised target. This means there could be extra borrowing at the end of fiscal year 2012-13. The hike in FII limit in gilts will help the government in the extra borrowing. The government is scheduled to borrow Rs 2 lakh crore during October-March after mopping up Rs 3.7 lakh crore in the first half.
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