FII inflows will go up in coming years: FM

By agencies   |   Friday, 21 October 2005, 19:30 IST
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NEW DELHI: Hinting at the recent volatility in the stock markets, Finance Minister P Chidambaram today said that Foreign Institutional Investment was here to stay with these flows accelerating in the coming years and indicated that the fundamentals of the economy were strong. ''If there is an inflow of FII money, then there will also be outflows. This is a fact of life one has to live with,'' Chidambaram said in his inaugural address at the 85th Annual General meeting of Assocham. Chidambaram gave facts and figures to stress the buoyancy of the external sector as well as the economy and the gradual transition to integration with the global economy. The theme of the event is 'Resurgent India - whose time has come.' The Finance Minister said the rupee was strong, there was strong inflows from FII's, Foreign Direct Investment (FDI) was at its highest ever though modest as compared with China, exports were growing at 20 percent, imports at 33 percent and the trade deficit large but ''certainly'' a healthy sign of a growing economy and there was likely to be a net accretion to foreign exchange reserves by the end of the current fiscal. Chidambaram said during his recent visits abroad, especially to China and Hong Kong, he got a clear impression that FII funds were here to stay and their pace likely to accelerate in the years to come. Chidambaram said the rupee was still strong, despite its recent fall against the dollar and the economy would continue to attract strong foreign institutional investment. ''As on October 18, the rupee is still strong despite some nominal depreciation. In terms of real effective exchange rate, the rupee is reasonably a strong currency,'' he said. The sensex has been on a roller coaster ride for the past several trading sessions, with stock markets experiencing high volatility. FIIs have resorted to huge selling during the past few days, dragging the sensex down.

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