Foreign Investors Flee Indian Bonds Amid Weak Rupee, Record Outflows

• Foreign investors are exiting Indian bonds, leading to expected record monthly outflows.
• Global funds sold $1.6 billion in December, the largest outflow since the 2020 Fully Accessible Route.
• Weakening Rupee, nearing end of interest rate cuts, and inflation concerns are key drivers.
• Outflows pressure Indian bonds, causing their largest monthly fall in four months and increasing borrowing prices.
• The Rupee hit an all-time low below 91-per-dollar before central bank intervention.

Why It Matters: Weak Rupee and policy shifts drive foreign investors to exit Indian bonds, causing record outflows.