RBI's Reddy on dynamics of balance of payments

In the speech 'Dynamics of balance of payments in India' given on 16 December Y V Reddy of the Reserve Bank of India said the gross volume of capital account transactions has been rising at a rapid pace, with bi-directional flows.

"Capital flows are managed from the viewpoint of avoiding adverse impact on primary liquidity growth and inflationary pressures. Capital flows are to be seen in the context of supply response of the economy and vulnerabilities or potential for shocks. A key issue in

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