US yield above 5% triggers ₹75,000 crore FPI outflow, says DSP Finance's Jayesh Mehta
CNBC-TV18 1 hr ago·12 Oct 2026, 5:55 am
Foreign Portfolio Investors (FPIs) have pulled out a significant ₹75,000 crore from Indian markets, a move largely driven by the US Federal Reserve keeping interest rates high. With US Treasury yields climbing above 5%, foreign investors are finding better returns in dollar-denominated assets. This capital outflow is creating pressure on the Indian rupee, which has weakened against the dollar recently.
For Indian investors, this trend is concerning as it reduces the pool of money available for domestic stocks and bonds. The sharp rise in US yields makes holding Indian assets less attractive compared to safer, higher-yielding options abroad. This dynamic often leads to volatility in the domestic market as investors adjust their portfolios to hedge against currency risks.
Moving forward, investors should keep a close watch on the US Federal Reserve's future policy decisions. Any signs that US rates might be peaking could trigger a reversal in capital flows. Additionally, the Indian government may need to introduce measures to stabilize the rupee and make domestic assets more competitive to retain foreign investment.
Excerpt from CNBC-TV18
Published On Oct 12, 2026 | 11:25 IST Last Updated On Oct 12, 2026 | 11:25 IST Jayesh Mehta, Vice-chairman and CEO of DSP Finance calls for changes in FPI taxation and tighter curbs on offshore currency trading to ease pressure on the rupee amid rising US bond yields. The recent surge in the US 10-year Treasury yield…Read the original at CNBC-TV18
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