"Aggregate FII (Foreign Institutional Investors) inflows into the Indian debt market in 2017-18 are expected to be limited to $5-10 billion, for which sufficient headroom exists within the existing limits for FIIs," said ICRA rating agency in its report.
"The bulk of the FII inflows into Indian debt in FY2018 will be in government securities (G-sec) or corporate debt, as concerns regarding the recent rise in state debt would be exacerbated by debt servicing for UDAY loans, pay revision and potential loan waivers by some state governments..." the agency said.
According to the report, FIIs interest in the Indian debt market has revived in the recent months.
After recording outflows of US$7.1 billion during October 2016- January 2017, foreign institutional investors invested $7.4 billion in the Indian debt market since February 2017.
In particular, inflows stood at US$3.9 billion in March 2017, the highest monthly tally since December 2011, the report said.
"The recent surge of FIIs investments into Indian debt is unlikely to sustain in the remainder of this fiscal, as factors such as a likely compression of spreads, geopolitical tensions and the sharp appreciation of the Indian rupee would temper the attractiveness of purchasing Indian debt," it added.
(This story has not been edited by Social News XYZ staff and is auto-generated from a syndicated feed.)
Doraiah Chowdary Vundavally is a Software engineer at VTech . He is the news editor of SocialNews.XYZ and Freelance writer-contributes Telugu and English Columns on Films, Politics, and Gossips. He is the primary contributor for South Cinema Section of SocialNews.XYZ. His mission is to help to develop SocialNews.XYZ into a News website that has no bias or judgement towards any.
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