New Delhi: The Reserve Bank of India has suggested Finance Ministry to set limits for investment in government securities in domestic currency instead of dollar as it would provide more headroom for investment by FIIs.
RBI, according to sources, has written to the Finance Ministry to consider setting up Foreign Institutional Investors (FIIs) limit in rupee terms.
The calculation in rupee term would provide higher headroom for investment and result in greater inflow of foreign currency.
Currently, the investment limit for G-sec by FIIs is pegged at USD 30 billion annually.
Out of the USD 30 billion, FIIs are allowed to invest USD 25 billion, whereas USD 5 billion is for long-term investors.
In rupee terms, the FII limit in the government securities is Rs 1.92 lakh crore.
The RBI and the government has been trying to attract FDI as well as foreign portfolio investment.
This is also necessary to keep the rupee stable against dollar.
Rupee has been depreciating against dollar for past few weeks but on Friday it gained 18 paise to close at one-month high of 63.55 against the US currency on sustained selling of dollars by banks and exporters amid firm stock markets.
India's foreign exchange reserves rose marginally by USD 239.4 million to USD 352.71 billion in the week up to June 5, on account of increase in foreign currency assets, according to RBI data released on Friday.
In the previous week, the reserves had increased by USD 917.5 million to USD 352.474 billion. The forex kitty had touched a record high of USD 352.876 billion in the week to May 15.
The foreign currency assets, which is a major component of overall reserves, rose by USD 192.9 million to USD 328.012 billion in the reporting week.
In 2014-15, there was an accretion to foreign exchange reserves to the tune of USD 61.4 billion compared with USD 15.5 billion last year.
Gold reserves also increased by USD 4.5 million to USD 19.34 billion, after remaining stable for many weeks.
