India's state pension fund will now be able to invest up to 65 percent of its holdings in sovereign bonds, up from 50 percent earlier, a labour ministry official said on Tuesday, in a move that will likely come as a relief to debt markets. "It has already been effective. The day we got the sanction from the government, we communicated it to the EPFO," Labour Secretary Shankar Aggarwal told Reuters over the phone.
The move, widely expected by traders, would help the Employees' Provident Fund Organisation (EPFO) buy more state government bonds, including debt sold under a big bailout of regional electricity utilities.
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