Capital Flows at Risk: India’s Experience

Artikel

With the spate of emerging market crises since the 1990s and the experience with the global financial crisis and its aftermath, attention has turned from the benefits associated with capital flows to their consequences such as accentuating financial vulnerabilities, aggravating macroeconomic instability and spreading contagion. For India, portfolio flows are the most sensitive to shifts in risk sentiment globally and spillovers. Applying a capital flows at risk approach, it is observed that in an adverse scenario, potential portfolio outflows can average up to 3.2 per cent of GDP. In a black swan event comprising a combination of shocks, potential portfolio outflows can rise to 7.7 per cent of GDP, highlighting the need for maintaining liquid reserves to quell such potential bouts of instability.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Journal: RBI Bulletin ; ISSN: 0034-5512 ; Volume: 76 ; Year: 2022 ; Issue: 6 ; Pages: 73-88 ; Mumbai: Reserve Bank of India

Classification and Topics

• Classification: Wirtschaft ; History of Economic Thought since 1925: International Trade and Finance ; Current Account Adjustment; Short-term Capital Movements ; International Lending and Debt Problems
• Subject: Capital flows ; global risk aversion ; capital flows at risk

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Muduli, Silu ; Behera, Harendra ; Patra, Michael Debabrata
• Event: Veröffentlichung
• (who): Reserve Bank of India
• (where): Mumbai
• (when): 2022

Further information

• Handle: http://hdl.handle.net/10419/260522
• Last update: 10.03.2025, 11:42 AM CET