Foreign portfolio investors (FPIs) continue to sell Indian bonds with sales already crossing $1 billion in June so far. With interest rates in the US market firm and the US Fed hinting at two more rate hikes this year, foreign investors appear to be apprehensive the rupee could weaken further. Already, over the past month, the US dollar index\u2014Dollex \u2014 has moved from 94.03 to 95.2 level on Thursday. This is at the highest level since January. The price of Brent oil was ruling at around $73 per barrel on Thursday. FPI sales in the equity market was at just below a billion dollar at around $900 million between June 1 and June 20. However, between January and now, the Indian currency has lost `4.36 or 6.05% against the dollar. Sales in the stock and bond markets seem to have aggravated the pressure on the rupee, dealers said. The rupee gained .08 paise on Thursday to reach 67.99 at close against the dollar; so far the currency has weakened by 90 paise in June. Other emerging market currencies have also lost value against the greenback. While the Indonesian rupiah has lost 3.87%, the Thai baht has given up 1.09%. However, Maylasian ringgit has given a positive return of 0.76 % since January. The weakening rupee could prompt foreign investors to offload more bonds, market observers said, since otherwise their portfolios would continue to lose value. Other emerging markets that are vulnerable to rising crude oil prices have also seen sell-offs in their bond markets. The Reserve Bank of India (RBI) recently revised the rules for investments by FPIs in Indian bonds. The central bank allowed a lower residual maturity for some categories of bonds. On June 15, the central bank raised the cap on aggregate FPI investments in any central government securities to 30% of the outstanding stock of that security from 20%. As on June 8, RBIs total Forex reserves had increased by $0.8 billion to $413.10 billion of which majority of the amount made a part of the foreign currency assets (FCAs). In an interview with FE recently, Pradeep Khanna, MD & head-trading at HSBC, said that India has had a policy of discouraging frictional debt holdings by FPIs and of encouraging more stable bond investments. \u201cAdditionally, higher USD rates, an increased US fiscal deficit and resultant higher USD issuances have provided some attractive alternatives for investors. Overall while conditions remain as currently expected, I would not expect a substantial increase in FPI flows into Indian debt this year,\u201d he said.