JOIN USOverseas investors have pulled out over Rs 17,000 crore (nearly $3 billion) from the Indian debt market in just a fortnight due to weakness in the rupee.
During June 3-14, Foreign Institutional Investors (FIIs) were gross buyers of debt securities worth Rs 4,092 crore, while they sold bonds amounting to Rs 21,213 crore translating into a net outflow of Rs 17,121 crore ($2.98 billion), as per data available with market regulator Sebi.
Experts attributed the huge sell-off to weakness in Indian currency, which is instrumental in the FIIs exiting the debt markets as the cost of hedging a volatile rupee is rising and in turn hurting the yield differential the FIIs are working with.
Of late, the rupee has been consistently hitting record lows and it slumped to a life-time low of 58.98 in the intra-day trade against the US dollar on June 11. The rupee, on Friday, closed at 57.51 against US dollar.