Foreign institutional investors (FIIs) have bought bonds worth $17.11 billion in 2014 so far, surpassing the earlier record of $10.05 billion in 2010. FIIs bought 98.48% of the available $25 billion in government bonds, as on September 1, according to data published by the National Securities Depository on Tuesday.
Currently, R1,22,542 crore worth of government bonds has been purchased and only R1,890 crore remains under the $25-billion limit, according to the data. FIIs have also been buying corporate bonds. In July, the RBI 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 raised the duration of investments for FIIs to a minimum residual maturity although it refrained from imposing any lock-in.