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:

Fast-tracking Projects

REUTERS SHOWCASE

Oil Prices

Oil Prices

Oil resumes slide after brief rebound on short-covering.  Full Article 

Space Programme

Space Programme

ISRO tests its heaviest space launch vehicle, eyes global market   Full Article 

Coal India Strike

Coal India Strike

Coal India workers threaten five-day strike, stokes output worries  Full Article 

Gold Discount

Gold Discount

Dealers offer gold discount for first time in five months  Full Article 

Lakhvi Granted Bail

Lakhvi Granted Bail

Pakistan court bails man accused of masterminding Mumbai attack  Full Article 

GST Bill

GST Bill

Cabinet clears bill for nationwide goods and services tax.  Full Article 

Aviation Sector

Aviation Sector

Breakingviews: SpiceJet rescue is no fix for India aviation woes.  Full Article 

Global Economy

Global Economy

Fed confident on U.S. growth, opens door wider to rate hike.  Full Article 

Reuters Poll

Reuters Poll

BSE Sensex to hit 32,980 by December 2015  Full Article 

Reuters India Mobile

Reuters India Mobile

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