Spike in EM, gold ETF inflows signals rising speculation, may have macro implications for Indian economy: Kotak
Kotak noted that continued large inflows into gold ETFs, along with strong physical gold imports, “may pose challenges to India’s CAD.” It added that “any reversal in recent FPI inflows to outflows may weigh on India’s BoP” and that large current account deficits and capital outflows “will complicate reserve money creation, domestic liquidity and deposit creation.”
Kotak noted that continued large inflows into gold ETFs, along with strong physical gold imports, “may pose challenges to India’s CAD.” It added that “any reversal in recent FPI inflows to outflows may weigh on India’s BoP” and that large current account deficits and capital outflows “will complicate reserve money creation, domestic liquidity and deposit creation.”
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