Near-term FII inflows to be steady: RBI

Reserve Bank of India (RBI) is expecting fund flows from foreign institutional investors (FIIs) in the bullish Indian stock market to remain steady in the near term.

"A series of India-centric funds being floated overseas reflect that FII
inflows are likely to remain robust in the near term," the RBI said in its
Report on Currency and Finance 2004-05.

"There has been a perceptible improvement in external debt indicators over the years, reflecting the growing sustainability of external debt of India," the report said.

India's external debt was $124.3 billion at the end of September 2005, up $2.2 billion from the end of June due to higher borrowings by Indian companies abroad.

The country's foreign exchange reserves are nearly $144 billion, exceeding external debt by about $20 billion and enough to cover around 13 months of imports.

The central bank said software exports have remained strong despite concerns about protectionist measures from the countries which import them. Also, expatriate Indians continue to send money home at a robust pace, making India one of the leading recipients of remittances in the world.

The resilience of the external sector during the current fiscal year was
reflected in the fact that a record level of the current account deficit was
financed through normal capital flows, it said.