Adverse global events may lead to $100-bn portfolio outflows: RBI article

India's forex reserves, at $596 billion in the week ended June 10, equivalent to less than 10 months of imports projected for 2022-23

Photo: Reuters

Photo: Reuters

Bhaskar Dutta Mumbai
Indian financial markets, particularly equities, have witnessed hefty foreign investment outflows the past eight months, amid higher US interest rates and a surge in global commodity prices brought on by the Ukraine war.

A weak outlook on the country's GDP growth after the scars inflicted by the Covid-19 pandemic has exacerbated the flight of foreign capital from Indian markets.

A paper authored by Reserve Bank of India staff, however, says that there is (only) a five per cent chance of portfolio outflows from India of the order of 3.2 per cent of GDP or $100.6 billion in a year, in response to a Covid-type contraction in GDP growth.

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First Published: Jun 20 2022 | 5:33 PM IST

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