Threshold for foreign ownership of domestic bonds has been raised by 9 percent for the current financial year in line with the increase in outstanding debt stock, reported The Economic Times.
The total limit now stands at ₹11. 73 lakh crore for 2022-23 against ₹10. 76 lakh crore earlier.
“The aggregate limit of the notional amount of CDS (credit default swaps) sold by FPIs shall be 5% of the outstanding stock of corporate bonds. Accordingly, an additional limit of ₹2,22,623 crore is set out for FY2022-23,” the Reserve Bank of India said in a notification.
Under the general category of government securities, the rise in limit is close to 6 percent. The sharpest increase in limit is in the category for long-term sovereign securities, known as Voluntary Retention Route (VRR) in market parlance with overseas investors obtaining a space of around 12%.
The limit for corporate bonds has been raised by 10 percent to ₹6. 68 lakh crore.