India raises debt limits for long-term foreign investors

MUMBAI Thu Jun 13, 2013 8:56am IST

Rupee notes are seen in this picture illustration taken in Mumbai June 12, 2013. REUTERS/Vivek Prakash

Rupee notes are seen in this picture illustration taken in Mumbai June 12, 2013.

Credit: Reuters/Vivek Prakash

Related Topics

MUMBAI (Reuters) - The Securities and Exchange Board of India (SEBI) raised the investment limits for foreign investors in government debt by $5 billion to $30 billion, but only long-term funds will be able to buy into that increased limit, according to a statement late on Wednesday.

The measures come as foreign funds have pulled out over $3 billion from the debt market in the past two weeks, contributing to a fall in the rupee to record lows.

SEBI said foreign institutional investors, which are registered as sovereign wealth funds, along with multilateral agencies, endowment, insurance and pension funds, and central banks will be able to buy into the $5 billion increased limit.

SEBI also said it would make available government debt on a first come, first serve basis, as opposed to the monthly auction system currently in place.

Furthermore, SEBI said FIIs who have already exhausted their investment limit will have a one-time opportunity to increase their debt investments by $250 million, as long as the overall foreign holdings don't surpass $25 billion.

Any FII who increases their investment limit will also have a lock-in period of 90 days.

India has been easing investment rules for foreign investors, moving away from a previously complicated system of categories limiting the debt that different set of investors could buy.

(Reporting by Rafael Nam; Editing by Supriya Kurane)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Kerry in India

REUTERS SHOWCASE

Deadly Landslide

Deadly Landslide

Landslide near Pune kills 10, scores feared trapped.  Full Article 

Fed Policy

Fed Policy

Fed presses forward with bond buying, cites uptick in inflation.  Full Article 

Big Infra Deal

Big Infra Deal

Piramal, Dutch APG tie up for $1 bln infra investment  Full Article 

E-Commerce

E-Commerce

Amazon says to invest $2 billion more in India   Full Article 

Lupin Results

Lupin Results

Q1 net profit up 56 percent on higher U.S. drug sales   Full Article 

Smuggling Gold

Smuggling Gold

Air India staff found smuggling gold  Full Article 

Economy Reboots

Economy Reboots

U.S. economy back on track with strong second-quarter rebound .  Full Article 

Auto Sector

Auto Sector

VW closes in on Toyota as global auto leader  Full Article 

Expanding Reach

Expanding Reach

Tata to invest $35 bln over 3 years, focus on new businesses   Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage