An auction for purchases of limits to buy gilts worth Rs 6,666 crore on Monday attracted nearly twice the subscription from foreign portfolio investors (FPIs). Given the huge appetite that FPIs displayed, market experts expect a big chunk of the bonds to be bought. Should that happen, the rupee could appreciate further since almost $1 billion could flow in. A total of 78 bidders tried their luck at Monday’s auction compared with just 38 in the previous auction held on December 18. The rupee closed at 63.50 to the dollar on Monday, after hitting a high of 63.25, the highest in two years and eight months. The Indian currency has put on 0.58% in 2018 sessions against the dollar on the back of a 6.7% gain in 2017. Between the debt and equity markets, FPIs invested close to $30 billion 2017.
Foreign investors put in bids worth Rs 11,988 crore ($1.88 billion) against a notified amount of Rs 6,666 crore(1.05 billion).