Millennium Post

FIIs have pulled out over $5 bn from debt, equities this month

Overseas investors have pulled out a staggering Rs. 29,191 crore (over $5 billion) from the Indian debt and equities in less than a month due to weakness in the rupee.

During 3-21 June, foreign institutional investors (FIIs) were gross buyers of debt securities worth Rs. 8,385 crore, while they sold bonds amounting to Rs. 32,549 crore translating to a net outflow of Rs. 24,163 crore ($4.2 billion), as per Securities and Exchange Board of India (Sebi) data.

Moreover, FIIs have taken away Rs. 5,028 crore ($848 million) from the equity market in June so far. However, total foreign investment in the country’s equity market is still Rs. 78,176 crore ($14.5 billion) so far this year. Market experts attributed the huge sell-off to weakness in Indian currency, which is instrumental in FIIs exiting the debt markets as rising cost of hedging a volatile rupee hurts the yield differential the FIIs work with. Of late, the Indian currency has been consistently hitting new record lows and it slumped to a life-time low of 59.94 (intra-day) against the US dollar on 20 June.
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