After six months of consecutive inflows, foreign institutional investors (FIIs) became net sellers of domestic equities in April. FIIs withdrew $1.29 billion in domestic securities in April, the highest since March 2020, according to domestic brokerage and research firm Edelweiss Securities. The outflows came as India began to see a massive outbreak of the coronavirus once again, while the world eased restrictions and expanded vaccination coverage. Before last month's outflow, FPIs pumped in $26.8 billion into equities between October 2020 and March 2021. The outflows are just a fraction of what FIIs had pumped in since October last year. The biggest sell-off was witnessed by banking and financial sector stocks, where FIIs pulled out $1.29 billion. This was followed by the oil and gas sector, where outflows amounted to $466 million, and in the metal sector, FIIs sold securities worth $242 million.

1. What is the impact of this news on INR? B) What are the consequences of the change in INR on the level of exports and the level of imports? C) Will the import cost be higher or lower

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Impact of FII Outflows on INR and Trade A Impact on INR The news of FIIs pulling out funds from the ... View the full answer