ECB cap up to 35 bn

While easing spending norms for external commercial borrowings ECBs, the finance ministry has raised the total cap on ECB inflows to from 21 billion to 35 billion. However, the ministry asserted that it had no plans to raise the cap on foreign institutional investor FII limit of investment in government securities as it had done for corporate bonds before.

8220;FII investment in government securities has a cap of 5 billion of which only 65 per cent subscription has happened. We will review the situation only when 80 per cent level has been reached,8221; secretary, department of economic affairs, Ashok Chawla said on Thursday. The government had permitted ECB up to 500 million per borrower per year for rupee expenditure and/or foreign currency expenditure dispensing the seven year maturity period condition for ECBs more than 100 million.

He said that RBI was closely watching the situation. 8220;We hope that these measures will have a positive impact. Otherwise macro-economic parameters continue to be robust,8221; he said. Growth prospects in the medium term look good and there is no cause for concern, he added.