RBI worries about foreign surge into Treasury-bills

Reuters : Tue Jan 29 2013, 10:59 hrs - See more at: http://www.indianexpress.com/news/rbi-worries-about-foreign-surge-intotreasurybills/1066233/#sthash.8yc6imUH.dpuf

* RBI says most of the recent foreign fund investment into debt has gone into treasury bills, providing little comfort towards a sustainable path in bridging the current account deficit, according to its macro-economic report on Monday. * India's ratio of short-term debt on a residual maturity basis to total debt rose to 43.7 percent as of the end of September 2012 versus 42.9 percent in the previous quarter, according to the report. * The comments are in line with the RBI's known discomfort about using debt inflows to plug the current account deficit, even as the government looks to boost more foreign investments. * India recently hiked the debt limit for foreigners in government and corporate bonds by $5 billion each taking the total limit for domestic debt to $75 billion. * "While the increased limit may enhance debt inflows, they do not provide a solution to current account deficit financing on a sustainable basis," says RBI's macro report. * RBI has disallowed investment by foreigners in short-term papers like t-bills for upto $15 billion of the FII limit in government bonds, in a recent decision. - See more at: http://www.indianexpress.com/news/rbi-worries-about-foreign-surge-intotreasurybills/1066233/#sthash.8yc6imUH.dpuf