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Foreign funds flee India's bonds just when it needs them the most

The amount of sovereign securities held by global funds has slumped Rs 76,700 crore ($10 billion) from this year's peak in February

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Foreigners hold about Rs 1.1 trillion or less than 2 per cent of India’s total outstanding debt (Illustration: Ajay Mohanty)

Bloomberg

2 min read Last Updated : May 27 2020 | 1:55 AM IST

Foreign funds have slashed their holdings of India’s government bonds to the lowest in three years amid dwindling returns, just as the nation embarks on a huge borrowing plan.

The amount of sovereign securities held by global funds has slumped Rs 76,700 crore ($10 billion) from this year’s peak in February as steep hedging costs diminished pay-offs in one of Asia’s highest-yielding markets. The rupee’s plunge by about 6 per cent in 2020 further reduced the appeal of Indian debt.

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“While the dollar cost of funding has come

Topics : India bond market foreign funds Mutual Funds government borrowing

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