It would therefore be useful to analyze the impact of global imbalances on various balance sheets within the country such as the government sector, financial sector including banks and financial institutions, non-financial private sector including corporates and households. Third, as mentioned earlier, surplus of oil exporting countries has emerged as a new factor in the debate on the global imbalance.
There are some indications that the oil surpluses are being deployed in more diversified avenues than official reserves. Oil exporters appear to have taken advantage of emerging investment opportunity in stock markets and real estate. Such inflows could have helped to keep long-term interest rates as also emerging market bond spreads low, even as policy rates are rising.