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Foreign portfolio inflows have played a key role in fuelling this boom.
America's huge (and still growing) current-account deficit has been financed in large measure by foreign portfolio inflows.
In the first three months of the year, Indian companies notified the RBI of plans to raise nearly US$10bn in overseas debt.* Foreign portfolio inflows.
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Purchases of bonds and stocks by foreign investors ("portfolio inflows") are important, too, and have held up surprisingly well, says Ms Edgeworth.
India relies heavily on portfolio inflows — foreign purchases of shares and bonds — as a means of covering its current account gap.
India runs a current-account deficit, which it aims to plug with portfolio inflows and foreign direct investment.
By country, Russia reported the most inflows of foreign portfolio money than any other global emerging market fund.
Because of all this uncertainty, the RMB is seen weakening due to the combination of a slower economy and lower capital inflows from corporate and foreign portfolio investment.
Large deficits need to be financed, but banking and portfolio inflows are now scarce, and even foreign direct investment, which used to be seen as less volatile, has fallen sharply this year.
By contrast, foreign direct investment in poor countries fell by a third during the crisis, and portfolio inflows fell by more than half.
See articleIndia's stockmarket briefly tumbled after regulators proposed restricting capital inflows from derivatives sold offshore, which would affect a sizeable chunk of foreign portfolio investment.
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