FIIs pull out $ 5.3 billion from India debt markets
In just a month the Indian debt market has witnessed a sharp pull out of $5.3 billion by Foreign Institutional Investors (FIIs) and the bulk of this has been in government bonds.
The selling led to vanishing of the $5.6 billion in inflows seen b/w January and May 21, 2013 after which FIIs started to sell down their debt holdings. FII positions in government bonds have now fell below 60% of the total investment limit of $25 billion.
Why these sell-offs?
The sell-off began after the US Federal Reserve, recently, hinted at a pullback in its quantitative easing program. Selling intensified after the Fed detailed that it will slow down its bond buying in 2013 and bring it to an end in 2014, if the economy continues to recover.