What happened
Debt mutual funds swung from July’s large inflows to an August net outflow. July saw net inflows of ₹1.87 lakh crore, while August recorded net outflows of ₹8,127 crore.
Causes
Experts attribute the reversal to seasonal cash movements by corporations and institutional investors, with liquidity preference shifting toward shorter and more liquid instruments.
Where the money went
- Liquid funds
- Money market funds
- Ultra-short duration funds
Implications
Analysts say the August shift could reflect temporary reallocation rather than a lasting change in debt risk appetite; continued monitoring in the coming months will clarify the trend.
