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The Finance Ministry has created a sub-limit of $ 5.5 billion for foreign investment in short term government papers such as treasury bills.
This sub-limit has been carved out of the overall $25-billion limit currently in place for foreign investment in government securities.
Similarly, in the case of corporate bonds, a new sub-limit of $3.5 billion has been created for foreign investment in short term papers such as commercial papers.
This sub-limit has been carved out of the overall $51 billion limit for corporate bonds.
These sub-limits have been carved out based on the current holdings of such short term instruments by Foreign Institutional Investors (FIIs) and have been provided so that existing investments are not adversely affected, an official release said.
The announcement on sub-limits forms part of the new investment policy for foreign investment in government securities and corporate bonds.
The new approach has come into effect from April 1.
Srivats.kr@thehindu.co.in
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