India has built up layers of defences against volatile capital flows

CHENNAI (Reuters) - Reserve Bank of India Governor Raghuram Rajan said on Friday India has built up layers of defences against volatile capital flows in financial markets by building up its foreign exchange reserves, improving its economy, and focusing on economic growth.

However, Rajan, speaking at an academic institute in Chennai, added that building foreign exchange reserves "beyond a point" is equivalent to intervention.

India has steadily built up its currency reserves, which had hit a record high of $353.88 billion as of May 15.

Rajan also said that the World Bank and Asian Development bank should be ready to bring in long-term risk capital for infrastructure projects in emerging markets.

Meanwhile, the China-backed Asia Infrastructure Investment Bank) is expected to launch by year-end with an aim to provide long term infrastructure funding for its emerging market members.

(Reporting by Suvashree Dey Choudhury; Writing by Himank Sharma; Editing by Rafael Nam)