Monday, 28 July 2014 00:00
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REUTERS: Foreign investors bought Rs. 31.8 billion ($ 244.24 million) worth of government securities last week, official data showed on Friday, a week after the country saw a net $ 307.13 million outflow in the debts.
The total foreign holding of government securities in the week that ended on July 23 rose 6.8% to Rs. 501.34 billion, compared with Rs. 469.53 billion a week ago.
The total foreign holding fell 7.9% last week after there was an outflow of Rs. 40 billion which the Central Bank said would not have an impact on the rupee currency.
On Thursday, Central Bank Governor Ajith Nivard Cabraal said the monetary authority would accommodate up to $ 500 million in inflows into government securities from the Reserve Bank of India after an agreement between the banks.
Last week’s inflow increased the foreign holding of total outstanding government securities to more than a 12.5% threshold set by the central bank.
The rupee, which hit a more-than-one-year high a week ago, has been on an uptrend since late February in the absence of strong demand for imports and private sector credit.
The Central Bank has absorbed about $ 750 million this year through to 14 July to prevent a sharp appreciation of the currency.
Foreign holdings of government securities rose 20% last year to Rs. 477.4 billion.
While the Central Bank has allowed some flexibility of the foreign holding threshold, by the end of the year, it has to fall within the 12.5% level.
