Liberalizing Capital Flows

This volume is an account of India's financial integration with the world economy which coincides with a period of intense fragility in the global financial environment. The volume analyses the complexities and loopholes in India's reform journey in the face of liberalization of capital movements. It answers several critical questions: What constitutes an appropriate strategy for managing capital inflows in India? What are the major stumbling blocks to complete
account convertibility? Is the domestic financial sector ready to face the impact of full capital account liberalization? How do impending macroeconomic reforms like fiscal imbalances constrain further
liberalization? In answering these questions, the book provides a positive, strategic, and normative analysis of monetary and financial governance. It identifies dangers to further liberalization unless key constraints limiting monetary policy responses are removed.