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India is likely to raise the cap on foreign institutional investment in government debt by $5 billion soon, two finance ministry officials said on Tuesday, to support the sliding rupee and fund a widening current account deficit.
The rupee fell 4.8% in May, and the current account deficit widened to 6.7% of gross domestic product in the December quarter, mainly driven by crude oil and gold imports and subdued exports.
"The file has been sent to the finance minister for signing, and once it comes back, the decision could be announced anytime," one finance ministry official, who did not wish to be named, told Reuters.
He said the government also planned to relax rules for FIIs' to invest in India by month-end, by easing registration norms, known as "Know Your Customer" rules.
