##o account. non - residents having a business interest in india can open a repatriable special non - resident rupee ( snrr ) account with balances commensurate with business operations. an indian company receiving foreign investment under the fdi route has been permitted to open and maintain a foreign currency account with an ad in india provided it has impending foreign currency expenditure. the account needs to be closed immediately after the requirements are completed or within six months from the date of opening of such account, whichever is earlier. 4 / 6 bis central bankers'speeches overseas investment india ’ s external sector management has gained strength over the last few years with a prudent and pragmatic approach to policy aimed at supporting india ’ s inherently strong macroeconomic fundamentals, which has made india as one of the most attractive destination for foreign investors. at the same time, the growth in magnitude and spread ( in terms of geography, nature and types of business activities ) of overseas direct investment ( odi ) from india reflect the increasing appetite and capacity of indian business sector in availing the opportunities thrown up by the rapid globalization. the robustness of direct investment flows – both inward as well as outward, serve as an indicator of the maturity and degree of integration of india in the global economy. while the average of total financial commitments ( fc ) under odi for 2014 – 15 and 2015 – 16 at around us $ 30 billion was lower than the average of preceding two years ( us $ 40 billion ), the outlook and potential for growth in outward fdi from india remain positive as seen by encouraging trend in proposals. actual outflows, which are asynchronous with the financial commitment have also varied over the period. overseas investment provides an important gateway for domestic businesses to enter the global marketplace and in recent times, india has taken some significant steps to make its presence felt in the global arena. the increased odi have also resulted into greater macro - economic cooperation between india and other countries, transfer of technology and skill, sharing of r & d and promotion of brand india. at the same time, the increasing degree of uncertainty in a continuously changing, and in recent times - often a disruptively changing global business environment, also poses some challenges for indian businesses with respect to their odi. the policy and regulatory approach has been to balance the need to pave the way for growth of indian businesses to keep pace with the changing demands of businesses and improve the “ ease of doing business ” for indian companies –

adequate buffers in the form of foreign exchange reserves is a natural self - insurance to manage these risks better and thereby prevent the risks from assuming systemic proportions, threatening financial stability. in the absence of a broader swap network, the macroeconomic environment of each country will inform the choice of policy instruments. in such a milieu, international financial stability is endangered when the inadequacy of buffers precipitates a crisis in one country and assumes global proportions. likewise, there cannot be any common code or uniform approach to capital account liberalisation. nimble capital flows management needs to be intellectually mainstreamed ( as also in practice ) as a conventional matter - of - fact component of the macro - prudential toolkit. indeed, any attempts to discourage the use of foreign exchange reserves as a macro - prudential tool would necessitate that capital flows have to be managed more actively. conference deliberations today and tomorrow could, perhaps, help shape the dialogue in this regard. 4 11. the conference may explore : how effective are such policies? should we think of them as short - term interventions or long - term policies? 12. financial stability is also endangered by asset bubbles. yield chasing investors – both domestic and foreign – can catalyse ( contribute to ) frothiness in asset markets. how much attention should central bankers be paying to such froth in asset markets in deciding monetary policy? 13. the link between asset markets and the real economy is another area of continuing interest for central banks. while the issue probably came to the fore during the global financial crisis, the mechanisms and channels which link them qualitatively and quantitatively are of fundamental importance for monetary policy. 14. a related source of concern for policymakers is about managing inflation. there is growing global uncertainty regarding the determining factors of inflation, especially in advanced economies. do we need to rethink the monetary transmission mechanism itself or is the recent weakening of the traditional link between policy and inflation just a temporary phenomenon? 15. a number of the papers in this conference will address some of these subjects. i look forward to fruitful discussions which will not just push the debate forward on these issues but, hopefully, also provide some enlightening policy insights. 16. thank you. 1 the government has been, inter alia, active in managing price pressures in some of the key food items. 2 one aspect in this context which hasn ’ t received the requisite attention is that those economies /