The investment limit for Foreign Portfolio Investors (FPIs) in government and corporate bonds have been raised by the Reserve Bank of India. The decision aims to bring in more foreign funds into the market. The investment limit for Foreign Portfolio Investors (FPIs) have been raised from 20% to 30% in government & corporate bonds.
Along with increase in the investment limit for Foreign Portfolio Investors, the RBI has also announced relaxations in the voluntary retention route (VRR) for FPI investments in debt. According to the RBI circular, the investment cap through VRR has been increased to Rs 1.5 lakh crore from Rs 0.75 lakh crore. The central bank has also permitted the FPIs to invest in exchange-traded funds that invest only in debt instruments.
Important takeaways for all competitive exams:
- RBI 25th Governor: Shaktikant Das; Headquarters: Mumbai; Founded: 1 April 1935, Kolkata.