Heavy FII investment not a concern: Pranab
18 Nov 2009
Finance minister Pranab Mukherjee said today that the surge in foreign institutional investor (FII) inflow is not a matter of concern, and measures will be taken to counter any "distortions" that emerge.
"It is not a matter of concern - we have a system of monitoring. Whenever we find that there are some distortions we have the arrangement to counter it therefore, it is not disturbing," Mukherjee told reporters in New Delhi on the sidelines of Union Bank event.
FIIs have put in over Rs71,900 crore so far this year in the country's bourses, the highest ever investment made in rupee terms in a single year. The huge inflow has led to the appreciation of the rupee.
With Western economies still coming out of recession and interest rates at or near historic lows, funds have been flooding into faster-growing Asian markets. Indian officials including Mukherjee have said on recent occasions that they welcome fund inflows.
At the same time, higher capital inflows have been instrumental in driving up stock and property prices and prompting Asian central banks, including the Reserve Bank of India, to adopt measures to curb the surge in real estate prices.