Foreigners can buy up to $1 bn of local bonds | business | Hindustan Times
Today in New Delhi, India
Nov 22, 2017-Wednesday
-°C
New Delhi
  • Humidity
    -
  • Wind
    -

Foreigners can buy up to $1 bn of local bonds

The government on Tuesday allowed foreign individuals to directly buy local companies’ bonds worth up to $1 billion (Rs. 5,500 crore), a move aimed at attracting more foreign capital and stem the rupee’s slide.

business Updated: May 29, 2012 22:54 IST
HT Correspondent

The government on Tuesday allowed foreign individuals to directly buy local companies’ bonds worth up to $1 billion (Rs. 5,500 crore), a move aimed at attracting more foreign capital and stem the rupee’s slide.

“A separate sub-limit of $1 billion has been created for QFI investment in corporate bonds and mutual fund debt schemes,” said Thomas Mathew, joint secretary in the finance ministry's capital market division.

QFI is shorthand for a foreign individual who trades in local equities and debt instruments through legitimate channels after making all necessary disclosures.

The $1-billion limit is in addition to the existing $20 billion (Rs. 1,10,000 crore) limit for foreign institutional investors (FIIs) in corporate bonds.

“We feel this will reduce volatility,” Mathew said.

The move is aimed at attracting more foreign capital to India. Markets have slumped, severely eroding investors' wealth after overseas funds withdrew a net $926 million (Rs. 5,400 crore) in April.