Foreign Investors Pump Nearly ₹8,000 Crore Into Indian Government Bonds In November As Rupee Strengthens

In the first week of November, foreign portfolio investors (FPIs) injected nearly Rs 8,000 crore into Indian government securities under the Fully Accessible Route (FAR), according to data compiled by PTI from Clearing Corporation of India (CCIL). This significant increase in FPI holdings occurred as the Indian rupee strengthened from 94.90 to 93.74 against the US dollar, aiding dollar-denominated returns for overseas investors.

Meanwhile, the yield on the 10-year benchmark government security declined by nearly 0.14 per cent, further enhancing the attractiveness of these securities. The rupee's recovery was driven by softer crude oil prices, stronger foreign fund inflows, and expectations of reduced tensions in West Asia. Brent crude oil, which had previously traded above USD 105 per barrel, fell to USD 96.41 per barrel, while a rally in global AI-related stocks bolstered market sentiment, prompting foreign investors to return to Indian equities.

This surge in FAR holdings follows a sharp drop in FPI investments in Indian government securities under FAR over the past three months, driven by concerns over global interest rates, currency volatility, and uncertainty surrounding India's inclusion in global bond indices.