Govt says it is equipped to manage heavy inflows
By Vaibhav Aggarwal
Nov 20, 2009
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Finance Minister, Pranab Mukherjee said that the government was prepared to deal wit heavy foreign capital inflow in case it became disruptive.

With Asian economies recovering at a faster pace than the Western economies, there has been a deluge of fund into Asian markets.

The finance minister said that they welcomed fund inflows but were ready to deal with them in case they created problems. He said, "It is not a matter of concern as we have the system of monitoring.

He said that whenever they found the funds causing any problem they would be ready with measures to solve the problem.

Higher capital inflows have led to increase in real estate and stock prices forcing RBI and other Asian Central banks to adopt measures to put a check on real estate prices.

Foreign investors have brought funds worth $15 billion in form of local equities after selling $13 billion in 2008, helping Indian stocks to gain more than 75 percent.

The government has parked excess funds with RBI. The funds parked with the apex bank amounted to Rs.61,343 crore. The idle money with RBI increased from Rs 12,837 crore in June 2009 to Rs 80,775 crore by end-September, and has stayed over Rs 60,000 crore since then.


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