Economy watch

Net FII debt inflows

Status: Rs 1,953 crore in January 2008.

Impact: Successive cuts in the US short-term rate have created a huge arbitrage opportunity for foreign investors to park their money in India’s safe haven debt market where they also have the scope to make profits if the rupee appreciates further against the US dollar.

Forex reserves

Status: $284 billion (Rs 11,36,000 crore) as on January 18, 2008.

Impact: Foreign exchange reserves are growing despite the sudden pullout by FIIs from the equity market.

This is due to inflows trickling in from sources like FDI, FII debt inflows and NRI remittances.

Experts say the NRI window will see increased inflows because of the interest rate differential between the US and domestic interest rates.

— Compiled by Anand Adhikari