India will monitor flows of foreign funds after its inclusion into JPMorgan’s emerging market debt index and take steps to avoid ‘hot money’ that can trigger volatility in currency and bond markets, a senior government official said.
“We will keep monitoring it. And when necessary, steps will be taken,” T. V. Somanathan, a senior Finance Ministry official told Reuters in an interview.
The aim will be to “prevent volatility or volatile inflows” but “never” to restrict outflows, Mr. Somanathan said, adding all possibilities are open to keep volatility in check.
