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FIIs pull out $1 bn from debt in 2016

Narrowing of yield spreads between US and India bonds triggers outflows

FIIs pull out $1 bn from debt in 2016

Foreign institutional investors (FIIs) turned net sellers of debt in August despite a steady rupee, taking their year-to-date debt sales to $1.2 billion. This is the highest net debt sale so far since 2013, when FIIs had sold debt paper worth about $8 billion. In contrast, these investors have purchased equities worth $6 billion this year. Market participants attribute the sales to the outflows in corporate bonds, which is likely to accelerate in the coming months due to maturing of foreign currency non-resident (bank) (FCNRB) deposits in September-November. RBI governor Raghuram Rajan ...