Increase in FPI inflows in July so far
- After pulling out over Rs 2.55 lakh crore since December 2021, FPIs have turned net buyers in India in July so far, bringing some relief to stock markets.
Reasons behind FPI pullout
- Tightening of monetary policy by US Federal Reserve to control inflation.
- Other central banks are doing the same.
- Rising bond yields in US
- Appreciating dollar
- Concerns regarding the possibility of a recession
SEBI decision
- The recent Sebi decision to allow FPIs in commodities derivatives market is expected to boost inflows.
- It will aid in integrating Indian commodity markets at par with global markets
- Facilitate managing pricing gaps and will enhance liquidity in the markets.
Prelims take away
- FPI
- SEBI
- Forex reserves
- Inflation
- Bond yields