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EPFO likely to announce 8.7% interest

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EPFO likely to announce 8.7% interest
Retirement fund body Employees Provident Fund Organisation (EPFO) is likely to retaina8.65 per cent interest rate on provident fund deposits for its about 50 million members for 201718 at its trustees´ meet on Tuesday, sources said.To maintain the 8.65 per cent interest this fiscal, the EPFO had sold a portion of its investments in the exchange traded funds (ETF) worth Rs 28.86 billion earlier this month, the sources said.
EPFO had announced this rate on deposits for 201617,atad lower than 8.8 per cent in 201516.It has earned a return of Rs 10.54 billion on sale of ETFs this month, which would be sufficient to provide 8.65 per cent rate of interest this financial year, said the sources.EPFO has been investing in ETFs since August 2015 and has so far not monetised the ETF investments.The EPFO has invested around Rs 440 billion in ETFs till date.
According the latest evaluation of the EPFO´s investments in ETFs, it has earned a return of 16 per cent.However, this return is notional because it could not be realised unless the EPFO liquidates these ETF investments.

The Business Standard, New Delhi, 21th February 2018

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