Foreign Funds from Overseas investors in Country’s bonds and equitieshave begun to gradually retreat due to the oil price surge globally. The exit of foreign investors is reflective of the burden being borne by the rupee and debt yields as in the nearing polls.
Net sold of Foreign Funds is around $862 million in capital assets (bonds+equities) by far for the month of April. Global crude oil prices have spiked about 7% in the month of March, with Brent crude touching $70 for a barrel. This climb has inflated India’s import bills.
All three markets, including equities are also corroborating overseas money outflow.
Voting’s in the Country for nominees to the Lower House of the Parliament will begin in the Country from April 11 in the first of seven rounds of polling that will conclude around mid-May. Overseas investors find this the right time to exit investments as election uncertainties remain and rising crude oil prices stoke fiscal concerns.
On Monday, the rupee dropped 0.65 per cent, or 45 paise, to close at 69.67, the weakest it has been since 12thMarch. Between April 2 – April 8, Rupee has lost 1.34% against the American dollar and dealers/traders expect it to fall as low as 70.50 to the dollar.