Business Standard
Saturday, Nov 21, 2009
 
drived banner
drived banner
  Advanced Search
Feedback | RSS
Content Guide
Follow us on  
  Home  |Markets & Investing|Companies & Industry|Banking & Finance|Economy & Policy|Opinion|Life & Leisure|Mgmt & Mktg|Tech World|BS Products 
 Section Home | News Now | Today's Paper | Features & Analysis | Politics & Public Affairs | Q&A | Columnists | BS Says
Home > Economy & Policy Live Markets | Smart Portfolios II
  Search:
Economists fear herd-like forex flight
Press Trust of India / New Delhi April 11, 2007
With India's forex reserve closing in on the $200 billion mark from just $1 billion in 1991, there is rising concern over possible exodus of overseas money, which in turn could lead to a sharp fall in asset prices across stock and property markets.

The non-FDI inflows today account for about 75% of the total reserves, which is making the country vulnerable to a possible large-scale flight of foreign investors from the country, economists believe.

Forex reserves are made up of foreign investments, short- term credits and banking capital, besides invisibles receipts and worker remittances.

A potential capital exodus could trigger a sharp fall in the asset prices across the board, including stocks and the rapidly growing real estate markets.

The country's foreign exchange reserves have increased by about $48 billion in the past one year on the back of strong capital flow, which in turn has been primarily driven by overseas corporate borrowings and the so-called "hot money" coming in form of portfolio equity flows.

While India has emerged as one of the favourite destinations for the portfolio equity flows from FIIs over the past few years, the sharp rise followed by a recent correction in the domestic bourses are raising concerns about large-scale profit booking by FIIs in the near future.

India Inc's growing appetite for merger and acquisitions as well as other expansion plans have also fuelled a sharp jump in the overseas borrowings by the domestic companies.

While RBI has been under pressure from corporates to allow greater overseas borrowing, economists fear that the apex bank could end up further tightening the noose if short-term borrowings continue to surge ahead.

 
 
Arrow Other Stories     
- Sensex makes remarkable recovery, regains 17K
- Bharati to go by Sebi norms on Great Offshore offer
- Galleon exits Edelweiss; sells 7% stake for Rs 255.54 cr
- Suzlon Energy's three promoters pledge 2.8 cr shares
- Draw export strategy of $300 bn: Assocham to govt
More  
  Read Business news in 
Advertisements
  Get financial advisory and solutions for your projects
  Holidays starting at a delightful EMI of Rs 3481
  Switch on and say hello to Monday morning !
  Your dream home can now be a reality.
  Visit Fortis for a preventive health check-up & get a 20% discount.
  Follow the ups and downs of your investments. Try our new Portfolio Tracker
  Kolkata Dock \ Freight contract for the British Gurkhas Nepal
  Find how Midsize Businesses use ERP to gain competitive advantage
  Trading in Forex is now as easy as 1-2-3
  Discover an economical and cost effective way to market your products and services
  Giftwithlove.com: Same day delivery of Flowers and Cakes to India
  Download the E-book on the Future of Business Intelligence
  Learn Best Practices for improving customer satisfaction
  Know your customers better... download the free e-book on CRM
   Discussion Board / User Comments    
Display Name  Email-Id  
Post your comment
shamsher April 11 , 2007 ,21:13 IST
Then get ready to be taken for a ride?? Quite dificult to differ for the near possibility.yet should not worry that much after all India is going to golden egg laying hen.
Reply
sankar1956 April 11 , 2007 ,15:47 IST
Then why rupee appreicates and it will make better return forexflight by fly by overnight investors. When transport fuel cost is such higher than before, how do we contain inflation etc.,
Reply
Most Popular
Read
E-Mailed
Commented
   
- Bharti Airtel slashes roaming rates by 60%
- Govt may allow private sector investment in education
- We are not trying for a monopoly: HAL chairman
- Patni may host all IT services on 'cloud'
- Suzlon Energy's three promoters pledge 2.8 cr shares
 
 More  
BS Poll
Cast Your Vote
 
   
 
Should rich charitable trusts be brought under the tax net?
  Yes  No
Submit

  Hot Searches  
 
Amitabh Bachchan | N Chandrasekaran | Swine Flu | Mukesh Ambani | Anil Ambani | TCS | Infosys |  Air India |  Duronto |  Pranab Mukherjee | Sonia Gandhi | Congress | Rahul Gandhi |  Bigg Boss |  New Pension Scheme |  Service tax |  Excise duty |  Sebi | Tech Mahindra |  Ramalinga Raju |  Satyam |  Reliance  |  RBI |  GDP |  Gold |  Ratan Tata |  ICICI |  |  B-School | DLF  Sensex |  Tax calculator | Home Loan  | Bollywood | Personal Finance |  inflation | oil prices |  World Bank | Reliance Infratel |  HDFC |  Barack Obama  
 
  Member Area Write to the Editor RSS Archives Advanced Search
  Subscribe to BS print product BS e-paper Newsletter Portfolio Tracker
  BS Products BS Hindi BS Motoring
FOR HOT PRODUCTS
BS Bazaar.com
Home | Markets & Investing | Companies & Industry | Banking & Finance | Economy & Policy | Opinion
Life & Leisure | Management & Marketing | Tech World
About Us | Partner With Us | Code of Conduct | Careers | Advertise with us| Terms & Conditions | Disclaimer | Site Map | Contact Us | Feedback