FIIs pull out Rs 7,600 cr from Indian debt market in a week

June 09, 2013 20:41

Overseas investors have pulled out more than Rs 7,600 crore ($1.35 billion) from the Indian debt market in the first week of this month owing to weakness in the rupee.

During June 3-7, Foreign Institutional Investors (FIIs) were gross buyers of debt securities worth Rs 2,487 crore, while they sold bonds amounting to Rs 10,162 crore translating into a net outflow of Rs 7,675 crore ($1.35 billion), as per data available with market regulator SEBI.

Market experts attributed the huge outflow from the debt market to depreciating Indian currency against the US dollar.

The rupee, on Friday, closed below the key 57-mark against US dollar for the first time in a year sliding by 22 paise to 57.06. The rupee lost nearly 1 per cent during the week.

FIIs have been aggressive buyers of bonds since the beginning of 2013 on account of higher yields offered by the government and corporate debt with a net investment of Rs 16,372 crore ($3.2 billion) so far this year.

Besides, steps taken by the government to ease FII investment rules by doing away with sub-limits and reducing the withholding tax on debt investments have also helped the segment.

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