Finance Minister Arun Jaitley favours FII investment limit for bonds in Indian rupee terms

By: |
New Delhi | June 27, 2015 9:25 AM

Finance Ministry is in favour of fixing FII investment limit for government bonds in Indian rupee terms instead of US dollar as it would provide more headroom for investments by foreign investors.

arun jaitley on fii investmentFM Arun Jaitley favours FII investment limit for bonds in Indian rupee terms. (PTI)

The Finance Ministry is in favour of fixing FII investment limit for government bonds in rupee terms instead of dollar as it would provide more headroom for investments by foreign investors.

Currently, the investment limit for G-sec by FIIs is USD 30 billion annually. Out of the USD 30 billion, FIIs are allowed to invest USD 25 billion, whereas USD 5 billion is for long-term investors.

“Finance Ministry favours setting FII limit in government bonds in rupee terms,” Finance Secretary Rajiv Mehrishi told reporters here today.

Earlier, the Reserve Bank of India had suggested the Ministry to set Foreign Institutional Investors (FIIs) limits for investment in government securities in domestic currency.

The calculation in rupee term would provide higher headroom for investment and result in greater inflow of foreign currency.

The RBI and the government has been trying to attract foreign investment. This is also necessary to keep the rupee stable against dollar.

Indian Rupee has been depreciating against dollar for past few weeks. Today it fell by two paise to 63.64 per dollar.

The country’s foreign exchange reserves rose by USD 1.57 billion to USD 354.29 billion for the week ended June 12.

The overall reserves rose by USD 239.4 million to USD 352.713 billion in the previous reporting week.

For Updates Check Economy News; follow us on Facebook and Twitter

Do you know What is Cash Reserve Ratio (CRR), Finance Bill, Fiscal Policy in India, Expenditure Budget, Customs Duty? FE Knowledge Desk explains each of these and more in detail at Financial Express Explained. Also get Live BSE/NSE Stock Prices, latest NAV of Mutual Funds, Best equity funds, Top Gainers, Top Losers on Financial Express. Don’t forget to try our free Income Tax Calculator tool.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1Jobs are back, income is not: Workers take lower-paying jobs; still suffer salary cuts
2Buy signal flashing; one pharma stock and one utility share may gain up to 17% in 3 months
3Momentum to continue,more steps in the works, says FM Nirmala Sitharaman