Further, the level of current account deficit that is considered generally sustainable by global financial markets in respect of emerging market economies is currently lower than the large amounts of capital inflows. Hence, enlargement of absorptive capacity is an appropriate approach, but only up to the limit of sustainable levels and is achievable over the medium term under normal circumstances.
Finally, it is, sometimes, suggested that encouraging outflows would be a good solution to manage surging inflows. Liberalising outflows may not be of great help in the short run because a greater liberalised regime generally attracts more inflows.