'Premature' to scrap foreign limits in govt debt: RBI's Rajan

MUMBAI Wed Aug 6, 2014 11:34am IST

The Reserve Bank of India (RBI) Governor Raghuram Rajan leaves after attending a news conference during the bi-monthly monetary policy review in Mumbai August 5, 2014. REUTERS/Danish Siddiqui

The Reserve Bank of India (RBI) Governor Raghuram Rajan leaves after attending a news conference during the bi-monthly monetary policy review in Mumbai August 5, 2014.

Credit: Reuters/Danish Siddiqui

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MUMBAI (Reuters) - Reserve Bank of India is not looking to scrap foreign investment limits in government bonds, Governor Raghuram Rajan said on Wednesday, adding it would be "premature" to do that before the global unwinding of stimulus measures and the start of a rate hike cycle.

The inclusion of government bonds into global indices is still in at a discussion stage, Rajan added, and reiterated the need to open the limits at a "measured pace", in a teleconference with analysts and researchers.

Separately, RBI Deputy Governor H.R. Khan said the central bank is in talks with the government to auction cash balances to improve liquidity management.

Khan also said the RBI is talking to the government about providing real-time information on their cash balances.

(Reporting by Neha Dasgupta and Suvashree Dey Choudhury; Editing by Anupama Dwivedi)

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