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RBI Kept FPI Investment Limit in G-Sec Unchanged at 6% of Outstanding Stock For FY25

Published on April 30, 2024
Current Context: The Reserve Bank of India (RBI) announced on April 26, 2024, that the investment limit for Foreign Portfolio Investors (FPI) in government securities (G-Secs) will remain unchanged at 6% of the outstanding securities stocks for the financial year 2024-25.
RBI Kept FPI Investment Limit in G-Sec Unchanged at 6% of Outstanding Stock For FY25
  • In addition, the RBI also stated that the FPI limits for investment in state government securities and corporate bonds will remain unchanged at 2% and 15%, respectively, of the outstanding securities stocks for FY25.
  • The allocation of incremental changes in the G-Sec limit (in absolute terms) over the two sub-categories – ‘General’ and ‘Long-term’ – will be retained at 50:50 for 2024-25.
  • Furthermore, the aggregate limit of the notional amount of Credit Default Swaps sold by FPIs will be 5% of the outstanding stock of corporate bonds.
  • Accordingly, an additional limit of ₹2,54,500 crore has been set out for FY25.

Question:

Q.1 What is the investment limit for Foreign Portfolio Investors (FPI) in government securities (G-Secs) for the financial year 2024-25?
a. 2%
b. 6%
c. 15%
d. 5%
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