India: RBI Says no Immediate Hike in Foreign Investment Limit in Government Debt

India has no immediate plans of raising the foreign investment limit in government bonds, Reserve Bank of India (RBI) Deputy Governor H R Khan has said.

"Right now there is no such discussion," Khan said on 12 June on the sidelines of a banking conference in Mumbai, reported Reuters.

Indian bond yields rose two basis points from the session low to trade flat at 8.54% on 12 June following Khan's comments.

India allows foreign institutional investments of up to $30bn (£17.8bn, €22.2bn) in government bonds, including $10bn earmarked for foreign central banks, sovereign wealth funds, insurance funds and pension funds.

The $20bn available to foreign investors across the board has been fully exhausted following an auction of the remaining 71.52bn rupees on 11 June.

When the limit hits 90%, foreign investors are allowed to buy debt only through an auction, widely considered as inconvenient.

The renewed interest in Indian government debt comes on the back of hopes that Prime Minister Narendra Modi's pro-business regime will be able to push through sweeping reforms, such as expediting investments and clearing infrastructure projects, to boost an economy suffering its worst slowdown in more than 25 years.