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The is with reference to "Stiglitz cautions against capital account convertibility" (Business Line, January 5). Prof Stiglitz has made two important points.

He is against capital account convertibility because of possible disruptive outflows. He has also supported the idea of using the forex reserves for infrastructure development.

The recommendations of the First Tarapore Committee were nixed by the East Asian Crisis that started in Thailand with the steep depreciation of the baht.

It is an irony that the Report of the Second Tarapore Committee may face the same fate again, what with turmoil again in Thailand, this time on account of the appreciation of the baht.

A. Seshan

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