Subbarao Says India Requires Capital Inflows to Finance Deficit
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India’s concerns about capital inflows are “less acute” than other countries because it needs the funds to finance its current-account deficit, central bank Governor Duvvuri Subbarao said.
After the U.S. announced its second round of quantitative easing in August 2010, “the prospect of easy liquidity in the U.S. seemed to prompt a large increase in capital flows to emerging market economies, threatening domestic price and financial stability,” Subbarao said in Zurich today, according to a speech e-mailed by the Reserve Bank of India. The U.S. move also seemed to stoke global commodity prices, he said.