Nonresident Deposits in India: In Search of Return?
IMF Working Papers, March 1, 2004
Source details
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- Nonresident Deposits in India: In Search of Return?
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Bibliographic details
- Authors: Poonam Gupta, James P. F. Gordon
- Published: March 1, 2004
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451846768.001
Summary and scope
- The paper analyzes trends in the accumulation of NRI (nonresident Indian) deposits and investigates the determinants of these inflows.
- Focuses on monthly deposit flows since the 1991 crisis and uses econometric analysis to identify determinants.
Key findings
- Monthly deposit flows have been quite stable since the 1991 crisis.
- There have been occasions when monthly flows turned negative in the short run, coinciding with adverse domestic or external events.
- Econometric analysis shows NRI deposits are influenced by standard risk and return variables.
Determinants identified (econometric results)
- Positive responses:
- NRI deposits respond positively to changes in relative interest rates on NRI deposits.
- NRI deposits respond positively to changes in LIBOR.
- Negative responses:
- NRI deposits respond negatively to political and geopolitical uncertainties, including the government resigning in mid-term and tensions on India's borders.
- NRI deposits respond negatively to adverse external events, such as the Asian crisis.
Subjects and keywords
- Subject: Bank deposits, Deposit rates, Exchange rate risk, Financial regulation and supervision, Financial services, Interbank rates, Oil prices, Prices
- Keywords: Asia and Pacific, Bank deposits, Capital Flows, deposit flow, Deposit rates, Exchange rate risk, flows During Specific Events, foreign currency, Foreign Currency Deposits, India, Interbank rates, Nonresident Deposits, NRI deposit, NRIs, NRNR deposit, Oil prices, rupee deposit, WP
IMF Working Papers — Nonresident Deposits in India: In Search of Return?