Mumbai: Close Voluntary Retention Retention (VRR) for foreign portfolio investors (FPIS) will be increased by Rs 1 Lakh Crore to Rs 2.50 Lakh Crore, given the increase in interest shown by them, the Governor of Bank of India Shaktikanta Das was announced on Thursday .
Increased VRR, which seeks to provide separate channels, is widely free of macroprudential control, to FPI investment in government debt securities and companies will take effect from April 1, said the watershed.
He said the special investment limit of Rs 1.50,000 Crore was set for investment under the previous VRR.
The increase is being carried out “considering the positive response to VRR as clear from the fatigue near the current limit”, the watershed.
It can be noted that this step also comes when hardening rates in advanced markets increase investor interest in other markets.
Read Alsorbi make repo rates unchanged at 4%; Maintaining the accommodating Stancethe Reserve Bank of India (RBI) Monetary Committee (MPC) on Wednesday unanimously decided to keep the repo not change at 4 percent for the ten consecutive time and continued with an accommodating attitude.
The Repo Rate is a rate at which the RBI lends to the bank, while the Reverse Repo Rate Isdas also announced that India will issue guidelines reviewed by the default credit swap (CD), almost nine years after first issuing guidelines.
The CDS market is important for the development of the liquid market for corporate bonds, especially for low ranking issuer bonds, he said.
DAS said considering the importance of the CD market – which had obtained infamanjity after the 2008 global financial crisis – the first review of the guidelines was announced in December 2000 and the draft guideline was issued a year ago.
The final guide will take into account the feedback received at the draft guidelines.
RBI to increase the VRR lid for foreign investors by Rs 1 Lakh from April 1
