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US Yield Surge Triggers Massive ₹75,000 Crore FPI Outflow, Warns DSP Finance
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CNBC TV18•12-10-2026, 11:25
US Yield Surge Triggers Massive ₹75,000 Crore FPI Outflow, Warns DSP Finance
- •DSP Finance CEO Jayesh Mehta highlighted that the US 10-year Treasury yield crossing 5% caused FPI outflows of ₹75,000 crore in 13 days.
- •Mehta stressed the need for structural reforms, including aligning FPI taxation with a source-based model to ease economic stress.
- •The rupee opened stronger following recent RBI measures that made it expensive for speculators to buy dollars.
- •Experts call for stricter controls on the offshore Non-Deliverable Forward market and stopping corporate participation to curb speculation against the rupee.
Key Questions Answered
Jayesh Mehta suggested aligning FPI taxation with the source-based model adopted for government securities, where investors pay tax in their home country rather than in India, to remove minor pain points during economic stress.
Recent Reserve Bank of India measures have steepened the forward curve, creating an expensive 8% forward rate that makes it costly for speculators to buy dollars and naturally encourages exporters to sell them.
DSP Finance recommends halting corporate participation in the onshore-offshore arbitrage window and stopping central bank interventions in the NDF space to prevent offshore speculators from taking directional bets against the rupee.
