An overall improved macroeconomic condition reflected in lower CAD, fiscal consolidation, upbeat market sentiment and an accretion to the foreign exchange reserves have enhanced the capacity of the country to manage external spillovers better. The recent surge of interest in India reflects the revived assessment about the country’s underlying potential.
RBI remains prepared to manage external spillover and India has the experience of managing phases of surges in capital inflows as well as phases of occasional sudden outflows as experienced in the aftermath of the global financial crisis and the taper announcement last May. 9. Let me finish this section of my remarks by outlining RBI’s current focus areas.