Rupee weakened due to RBI surprise announcement

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New Delhi: The growing cases of corona cases are now having an impact on the Indian economy as well. So far this month, Foreign Portfolio Investors (FPIs) have withdrawn Rs 929 crore from the Indian market. In the last quarter of January-March 2021 of the last financial year 2020-21, the trend of foreign investors was in sharp contrast and they had invested in the Indian market. Earlier, FPIs had invested Rs 14,649 crore in January, Rs 23,663 crore in February and Rs 17304 crore in March. Thus, after the initial three months of investment in the current year 2020, due to the Corona crisis, the attitude of foreign investors has changed so far and they have withdrawn Rs 929 crore so far in April 2021.

According to the depositories data, Overseas Investors has withdrawn Rs 740 crore from equities and Rs 189 crore from debt segment and a total withdrawal of 929 crore took place between April 1 and April 9. The rupee weakened due to surprise announcement by RBI to buy government securities, due to which FPIs have withdrawn.

According to Rasmic Ojha, executive vice president of Kotak Securities and executive head of Fundamental Research, FPIs are withdrawing from the Indian market due to weakness in the US dollar and rising cases of corona infection. According to Ojha, in the meeting of RBI’s monetary policies, a surprise announcement was made by RBI for the purchase of government securities worth Rs 1 lakh crore in the first quarter of the current financial year 2021-22. Due to this, the rupee weakened and compared to the dollar, its price fell from Rs 74.8 to Rs 72.4.

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