SEBI auctions Govt. debt securities worth $9.34 bn
With the aim to attract foreign investors towards Indian debt market, market regulator SEBI auctioned government debt securities worth $9.34 billion (Rs 58,264 core) and it received bids worth $10.4 billion (Rs 64,908 crore).
The FIIs were in a trend of selling their holdings after the US announced that it would taper the the $85-billion-a-month bond purchase programme as early as next month and end it next year if the US economic recovery is up to its expectations.
This is the biggest ever auction for such bonds and exceeds the previous record of Rs 42,022 crore, auctioned two months ago on June 20, and neutralizes the prevailing concerns in markets with regard to foreign investments.
As per experts, the fall in the Indian currency has been instrumental in overseas investors exiting debt markets as the rising cost of hedging a volatile rupee hurt the yield differential the FIIs work with.
With a view to attract foreign investments, the government recently raised the investment limits for FIIs in government debt to $30 billion, from $25 billion previously.