Norms for FPIs to invest in debt eased, may boost rupee, corporate bonds

The RBI increased the FPIs cap on investment in government security to 30 per cent of the outstanding stock of that security, from 20 per cent earlier

The Reserve Bank has eased investment norms for foreign portfolio investors (FPIs) in debt, especially into individual large corporates, a move that can help attract more overseas flows and thereby help arrest the recent fall in the rupee on one hand and also lift the recent fall in demand for corporate bonds.

FPIs are allowed to invest in various debt market instruments such as government bonds, treasury bills, state development loans and corporate bonds, but with certain limits and restrictions.

The RBI increased the FPIs cap on investment in government security to 30 per cent of the outstanding stock of that security,