The Hindu Business Line : ‘Capital flows will slow down only marginally’

Chennai, Sep 23 The turmoil in the US financial market may at best result only in a slight slowdown in capital flows into India, feels Dr C. Rangarajan, Member of Parliament (Rajya Sabha) and former Governor of the Reserve Bank of India.

Speaking to Business Line on the sidelines of the Annual Day of the Madras School of Economics here, Dr Rangarajan observed that capital flows depend more on the speed at which issues are resolved.

Though the financial market meltdown could slowdown the US economy and thereby affect India’s exports, the “offsetting factor” is the decline in oil prices, he said.

Dr Rangarajan, who was until recently the Chairman of the Economic Advisory Council, a body that advises the Prime Minister, said that the US government bailing out the distressed financial institutions is good for India and the rest of the world.

He noted that Morgan Stanley and Goldman Sachs becoming banks is a positive development because banks are stronger institutions.

Asked if he sees a slowdown in the Indian economy, he said, the Economic Advisory Council has already projected 7.7 per cent for the current year. “I don’t think it will be affected.”

More Stories on : Forex | Stock Markets

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
How terrible is the US financial crisis?

‘Capital flows will slow down only marginally’

Rupee weakens on dollar demand

Sideways move in rupee

Cos can issue exhangeable bonds in foreign currency

Now, for the economy

‘Controlling inflation is priority’

Bond prices up

Cos unlikely to take ECB route as spreads are high

Call rates close lower

Bank strike on as talks fail