CURRENT AFFAIRS

Detailed explanation-1: -In a move that could lead to higher foreign inflows, the Reserve Bank of India (RBI) has hiked the short-term investments by foreign portfolio investors (FPIs) from 20 per cent to 30 per cent of the total FPI investment in Central government securities (including Treasury Bills) or state development loans.

Detailed explanation-2: -The limits for FPI investment in Government securities (G-secs), State Development Loans (SDLs) and corporate bonds shall remain unchanged at 6%, 2% and 15% respectively, of outstanding stocks of securities for FY 2022-23.

Detailed explanation-3: -A dedicated investment limit of Rs 1.50 lakh crore was set for investments under the VRR. Given the positive response to the VRR as evident from the near exhaustion of the current limit, it is proposed to increase the investment limit under VRR by Rs 1 lakh crore to Rs 2.5 lakh crore with effect from April 1, 2022.

Detailed explanation-4: -The notification further said the aggregate limit of the notional amount of Credit Default Swaps (CDS) sold by foreign portfolio investors (FPIs) shall be 5 per cent of the outstanding stock of corporate bonds. Accordingly, an additional limit of Rs 2, 22, 623 crore is set out for FY 2022-23.

Detailed explanation-5: -The investment limit under the VRR is increased to ₹2, 50, 000 crore from ₹1, 50, 000 crore. The updated Directions are as given in the Annex. 5. These Directions shall be applicable with effect from April 1, 2022.