Despite the narrowing spread of yields between the benchmark 10-year Indian government bond and the 10-year US Treasury bond, foreign portfolio investors (FPIs) are continuing to invest in the domestic debt market this year — a trend backed by a stable currency and a less volatile bond market. FPIs have been net buyers in the debt market in 2023 so far, marking the first time since 2019. The yield spread between the 10-year Indian government bond and the 10-year US Treasury note stood at 3.14 per cent on August 8 – the narrowest in over a decade.
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