Reserve Bank of India (RBI) Vice President T Rabi Sankar said India is trying to achieve its long-standing goal of converting its capital account.
Sankar said at the Forex Dealers Association event that the conversion rate of capital accounts increased domestically.
Capital accounts of all countries record net fluctuations in foreign assets and liabilities, but convertibility is the conversion of domestic currency to foreign currency and vice versa to pay for balance of payments (BoP) transactions. Refers to the function to be performed.
Balance of payments is a financial transaction that a country makes with another country in the world for a specific period of time, usually one year.
“India has come a long way in raising the level of convertibility of its capital account. Widely achieved the desired outcomes for India’s policy choices in achieving a stable composition of foreign capital inflows. I did, “he said.
At the same time, he said the country is also witnessing some fundamental changes in this area where greater market integration is expected in the near future.
Sankar said capital account conversion rates will also accelerate through measures such as more free access to non-resident debt and greater market consolidation.
With this increase, the right combination of capital flow measures, macroprudential measures and market interventions creates a responsibility to ensure that such flows are effectively managed, Sankar said.
He suggested that the role of the RBI was limited to taking precautionary measures.