Mumbai: Franklin Templeton Investments bought about Rs8,000 crore ($1.2 billion) of Indian government bonds in two days this week, a person with knowledge of the matter said.

The purchases, made on Tuesday and Wednesday, were largely for tenors maturing in 2021-2023, said traders who asked not to be identified because they aren’t authorized to speak publicly. JPMorgan Chase & Co. was the broker which bought the securities, they added.

Foreign funds have been pouring into India, driving stocks to a record and pushing up bond prices, since Prime Minister Narendra Modi’s party won an election in a key state on 11 March. Yields on local 10-year bonds are among the highest in the region and the rupee’s rally post the election results has made it Asia’s best-performing currency this month.

“The outcome of state elections, a dovish hike by the Federal Reserve and relatively attractive valuations have been the key drivers of inflows," said Nagaraj Kulkarni, a senior rates strategist at Standard Chartered Plc in Singapore.

Overseas banks were the biggest buyers of government bonds on Wednesday, with net purchases of about Rs5,400 crore, data from the Clearing Corp. of India show. That marked an 11th straight day of net buying.

Franklin Templeton’s Singapore-based spokeswoman Melissa Tan and JPMorgan’s India spokeswoman Mollica Senapati in Mumbai both declined to comment.

The yield on benchmark 10-year government bonds slipped eight basis points in the last two sessions. It rose one basis point to 6.82% as of 12:29pm in Mumbai, reversing an earlier decline, after a report said authorities are set to discuss putting in place a new facility to absorb surplus cash in the banking system. Indian lenders, the biggest holders of sovereign debt, typically use excess funds to buy bonds.

Modi’s majority win in Uttar Pradesh, India’s biggest state, is seen emboldening him to take more measures to spur expansion in Asia’s third-largest economy, which already boasts one of the fastest growth rates among the world’s major countries.

The rupee was little changed at 65.4325 per dollar in Mumbai. Its 1.9% advance this month is the best performance in Asia. Bloomberg