 "India may sell extra government bonds to foreign investors via auction")
The Reserve Bank of India is likely to sell extra government bonds made available for foreign institutional investors last week through an auction rather than on demand as of now, a senior official with direct knowledge told Reuters on Tuesday.
RBI said a week ago that it would gradually increase the limits it sets for foreign investors buying government debt by up to Rs 1.2 trillion ($18.37 billion) by March 2018.
Under Indian rules, government debt is usually sold via auction - rather than "on tap" for most foreign investors once they use more than 90% of the total debt limits. Foreign institutional investors have already used up almost their entire $25 billion allocation of government debt.
"Given that the amount utilised is above 90%," said the official, "the limits will be sold on auction basis."
In a first step, India will increase debt limits for the category of investors composed of foreign institutional investors (FIIs) by Rs 5,500 crore ($842.11 million) starting on Oct. 12.
FIIs, which include several kinds of investors like mutual funds, pension, insurance funds, hedge funds, central banks and banks typically account for the overseas investments into India. ($1 = 65.3125 rupees)
