The Reserve Bank of India (RBI) on Thursday announced a raise in investment limit in the debt market for foreign portfolio investors (FPIs) from Rs 1,50,000 crore to Rs 2,50,000 crore under the voluntary retention route (VRR).

Governor Shaktikanta Das, while announcing MPC policy decisions, said the investment limit was increased by Rs 1,00,000 crore as VRR received good responses from investors.

"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 by Rs 1,00,000 crore to Rs 2,50,000 crore with effect from April 1, 2022," The revised investment limits are being notified today."

VRR, a route for investment in government and corporate debt securities by FPIs, was introduced on March 1, 2019, with a view to facilitating stable investments in debt instruments issued in the country.

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The investment route sought to provide a separate channel, broadly free of macroprudential controls, to FPIs with long-term investment horizons, the RBI said. Earlier, the investment limit under VRR was set at Rs 1,50,000 crore.

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 1,00,000 crore to Rs 2,50,000 crore with effect from April 1, 2022.

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Meanwhile, the central bank, in its monetary policy diciscions announced today, projected India's real GDP at 7.8 percent, retail inflation at 5.3 percent, while keeping repo and reverse repo rates unchanged.

(Edited by : Bivekananda Biswas)

First Published:Feb 10, 2022 12:18 PM IST