New Delhi: The Reserve Bank of India’s monthly bulletin presents a downslide in foreign direct investment and record selling by the central bank in the foreign exchange market to contain the volatility of the rupee.
Net foreign direct investment in India fell to $0.5 billion for the April to November 2024 period from $8.5 billion in the same period in 2023, Business Standard has reported.
The report noted that this reflects the rise in repatriation as well as overseas investments by Indian firms.
Gross inward FDI during that period increased to $55.6 billion from from $47.2 billion a year ago. Disinvestment from direct investors rose to $39.6 billion during the same period. This April-November period in 2023 had $ 29.7 billion disinvestment.
Outward foreign direct investment, meanwhile, rose to $15.5 billion in April-November 2024 from $8.9 billion a year ago.
The news agency Reuters has reported that foreign inflows that were expected into Indian government bonds over the next two-and-a-half months will fall short of expectations. This is largely propelled by a currency that is “repeatedly hitting lifetime lows and Treasury yields that are hovering at multi-month highs,” according to investors.
Meanwhile, the Business Standard also reported that the RBI’s monthly bulletin notes that made sales of a record $20.2 billion in the foreign exchange market in November. This pushed its net short position in the forward market to $58.9 billion by the month’s end.
The RBI did this largely to contain rupee volatility against the dollar.
By comparison, the RBI’s net forward sales position at the end of October 2024 was $49.18 billion.
