RBI raises limits on FPIs’ debt investment

RBI raises limits on FPIs’ debt investment

What has happened?

The Reserve Bank on Friday upped debt investment limits for foreign portfolio investors (FPIs) across all segments, which will cumulatively result in an increase of more than Rs. 1 lakh crore in fiscal year 2018-19

Numbers

The total debt limit will rise to Rs. 5,94,600 crore by September 2018 and go up further to Rs. 6,49,900 crore by the end of the fiscal year from the present Rs. 5,45,823 crore

Limits on FPI investment in Central government securities

RBI has decided to increase the FPI investment limits in central government securities by 0.5% to 5.5% of outstanding stock of securities in 2018-19 and 6% of outstanding stock of securities in 2019-20

Limits on FPI investment in SDLs unchanged

The limits on FPI investment in state development loans (SDLs) would remain unchanged at 2% of outstanding stock of securities

Corporate bonds

On corporate bonds, the FPI investment will be fixed at 9% of outstanding stock of corporate bonds and all the sub categories within the segment will be discontinued.