Foreign investors turn sellers in government bonds after two months of strong buying
Foreign portfolio investors (FPIs) have turned net sellers of Indian government bonds, offloading ₹987 crore worth since August after two months of strong buying. This reverses net purchases of ₹49,355 crore in June and July made through the Fully Accessible Route (FAR). The reversal reflects rising global bond yields, Bloomberg's deferral of Indian debt's index inclusion, and growing expectations of a domestic rate hike.
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FPI flows into government bonds and routes like the FAR are relevant to economy and banking sections.
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- FPIs sold government bonds worth ₹987 crore since August.
- They had bought a net ₹49,355 crore in June-July via the Fully Accessible Route (FAR).
- Drivers: high global yields, Bloomberg deferring index inclusion, rate-hike bets.
- US 10-year Treasury yield hit 4.81%, highest since November 2023.
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