RBI, according to sources, has written to the Finance Ministry to consider setting up FIIs limit in rupee terms.

The calculation in rupee term would provide higher headroom for investment and result in greater inflow of foreign currency.

Currently, the investment limit for G-sec by FIIs is pegged at USD 30 billion annually. Out of USD 30 billion, FIIs are allowed to invest USD 25 billion, whereas USD 5 billion is for long-term investors.

In rupee terms, the FII limit in the government securities is Rs 1.92 lakh crore.

The RBI and the government has been trying to attract FDI as well as foreign portfolio investment. This is also necessary to keep the rupee stable against dollar.
Rupee has been depreciating against dollar for past few weeks but yesterday it gained 18 paise to close at one-month high of 63.55 against the US currency on sustained selling of dollars by banks and exporters amid firm stock markets.

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