Foreign investors have significantly increased their exposure to Indian government bonds, purchasing ₹5,551 crore ($631 million) worth of debt in the past week—marking a 46-fold jump compared to the previous week. This surge comes in response to the Reserve Bank of India’s (RBI) aggressive intervention to stabilize the rupee, which had recently come under speculative pressure.
According to data from the Clearing Corporation of India Ltd., global funds had bought only ₹121 crore worth of bonds in the prior week. The RBI’s move to defend the rupee, which included targeted currency market operations, helped the Indian currency appreciate nearly 1% last Wednesday. This intervention has boosted investor confidence and improved the yield outlook for Indian debt instruments.
Market analysts suggest that the RBI’s actions signal a strong commitment to maintaining currency stability, which in turn makes Indian bonds more attractive in a volatile global environment. The central bank is reportedly prepared to continue intervening until the rupee settles at a stronger and more stable level.
The renewed interest in Indian bonds also positions them to outperform other emerging market peers for the second consecutive month. With improved returns and reduced currency risk, India’s fixed-income market is becoming a preferred destination for global funds seeking stability and yield.
This development underscores the RBI’s growing influence in shaping investor sentiment and highlights the strategic importance of currency management in attracting foreign capital.
