Inflows into G-secs through FAR turn positive after outflows in Oct and Nov

The inflows into securities designated under the fully accessible route (FAR) rebounded in December and are expected to sustain despite a narrowing yield spread between US and India as domestic demand keeps yields capped. FAR securities witnessed Rs 661 crore worth of inflows till Thursday, despite the surge in US yields by 11 basis points. A basis point is a hundredth of a percentage point. Starting January, Bloomberg will include India’s bonds in its indices which is expected to further boost inflows in debt. FPIs were net sellers of government securities designated under FAR in October and November. They net sold around Rs 5,187 crore worth of FAR securities in November and Rs 5,142 crore in the previous month. October was the first net outflow from FAR securities since April 2024.