RBI Holds FPI Bond Caps at 6% for FY27, Adds Rs 3.30 trn
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- RBI retained a 50:50 split for incremental changes in the G‑Sec limit between the General and Long‑term sub‑categories for FY27, as outlined in its circular on FPI debt investment and CDS sales.
- RBI kept the General Route limits for foreign portfolio investors unchanged at 6% of outstanding Government Securities, 2% of outstanding State Government Securities, and 15% of outstanding corporate bonds for FY27.
- RBI capped the notional amount of credit default swaps that FPIs can sell at 5% of the outstanding corporate bond stock.
- RBI introduced an additional overall limit of Rs 3,30,464 crore for FY27.
- RBI added the entire increase in State‑Security limits to the General sub‑category of SGSs.
- RBI announced that from 1 April 2026, all investments under the Voluntary Retention Route will be subject to the General Route limits.
- Indian bond market reached its highest closing point in seven weeks, with overseas investors buying $800 million of Indian bonds after a crude‑oil price decline boosted confidence.
Why it matters: Foreign investors retain existing access to Indian government, state and corporate bonds, while the RBI’s Rs 3.30 trn added ceiling and balanced G‑Sec split could lift total foreign inflows, deepening market liquidity for issuers; no new caps are imposed, so the cost of entry stays unchanged.
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