FDI inflows spike; Moody’s cheers more

The cumulative flows of $22.83 billion for the April-November period have crossed $19.43 billion which came in the full fiscal of 2010-11,according to officials.

Analysts feel that if the trend continues,the FDI in the current financial year would well cross $30 billion,a development which will have a positive effect on rupee in the foreign exchange market.

In the face of selling pressures in the stock market from the foreign institutional investors and rising trade deficit,the rupee has declined by about 15 per cent since August.

While the FII inflows are considered “hot money”,the FDI is quite stable.

The improvement in FDI inflows in November comes after two months of declining trend.

The Moody’s upgraded India’s short-term foreign currency rating from speculative to investment grade.

“Diverse sources of Indian growth have enhanced its resilience to global shocks”,the global rating agency said,adding present slowdown “could reverse sometime in 2012-13,as inflation cools from current 9 per cent levels”.

Meanwhile,the Finance Ministry said it has approved FDI proposals worth Rs 1935 crore.