Govt. to woo foreign investment into bonds with no exchange loss guarantee

Thursday, 17 September 2020 03:10 - - {{hitsCtrl.values.hits}}

The Government is to attract more foreign investments into Treasury Bonds with an assurance of no exchange losses.

The proposal was revealed by State Minister of Money and Capital Market and Public Enterprise Reforms Nivard Cabraal on Tuesday at an investor forum organised by Softlogic Stockbrokers.

He said the Central Bank is looking at addressing the exchange rate fluctuations which is a deterrent to foreign investors in to Government securities.

“The idea is if a foreign funds invests in Government securities today at a particular exchange rate, when he sells he will be assured of the same rate,” Cabraal explained.

He told the forum that by end-2014, foreign investments in Government bonds were as high as $ 3.4 billion and by end-2019 they have dwindled to $ 400 million. The Central Bank this week said the total outstanding exposure of foreign investment in the rupee-denominated Government securities market remained low at $ 69 million by end-July.

In the first seven months of 2020, there had been a net foreign outflow of $ 515 million from the rupee-denominated Government securities market.

“So judging by the levels as at end 2014, there is space for foreign investments in Government securities market to go up,” Cabraal added.

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