Govt focus on fiscal health spurs FPI flows into g-secs
budget seems to have spurred foreign investors to step up purchases of government bonds, with overseas investment in such debt well poised to head past the $2 billion-per-month flow that was expected after inclusion in a JP Morgan index.
Aggregate holdings of foreign portfolio investors (FPI) in index-eligible fully accessible route (FAR) government bonds increased by ₹1,963.7 crore to ₹1.9 lakh crore on Tuesday, following the presentation of the FY25 budget.
On Wednesday, the FPI holdings of FAR bonds rose further, with the total holdings crossing the ₹2 lakh crore mark, according to data published by the Clearing Corporation of India (CCIL) at the end of trading hours on Wednesday.
Counting June 28 — the day that inclusion of Indian bonds in a JP Morgan index commenced — FPI investment in the FAR category has risen by ₹15,383.73 crore, or around $1.8 billion, the data showed.
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«Investors, both domestic and international, have taken a positive view of the budget outcome including the government's commitment to fiscal consolidation, and expect debt investment inflows to continue. The July investments by FPIs are likely to exceed $2 billion and may continue at a higher pace going forward as well,» said Parul Mittal Sinha, head-financial markets, India and South Asia at Standard
