India is likely to sell extra government bonds made available for foreign institutional investors last week through an auction rather than on demand as of now, a senior official with direct knowledge told Reuters on Tuesday.
Under the country's rules, government debt is usually sold via auction - rather than "on tap" for most foreign investors once they use more than 90 per cent of the total debt limits. Foreign institutional investors have already used up almost their entire $25 billion allocation of government debt.
"Given that the amount utilised is above 90 per cent," said the official, "the limits will be sold on auction basis."
In a first step, the government will increase debt limits for the category of investors composed of foreign institutional investors (FIIs) by 55 billion rupees ($842.11 million) starting on October 12.
FIIs, which include several kinds of investors like mutual funds, pension, insurance funds, hedge funds, central banks and banks typically account for the overseas investments into India.
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