The finance ministry on Tuesday said foreign investors were unlikely to resort to heavy selling and good capital flows were expected into the country in the medium term, even as the meltdown continued in the stock domestic market due to the debt crisis in the US and Europe.
"We believe the RBI is well-positioned to take care of India's need," joint secretary Thomas Mathew told reporters when asked about the impact of the crisis in the US on India.
An unprecedented downgrade of the long-term sovereign credit rating of the US has unleashed mayhem on markets across the world, including India, which have been already battling concerns over the European debt crisis.
Mathew said there could be some volatility in the next few days, but it would be manageable.
"We see good capital flows in the medium-term... We do not expect heavy selling by FIIs (Foreign Institutional Investors)," he added.
He also said there were no payment problems at all, despite the massive volatility on the bourses.
Indian stocks continued their fall for the second consecutive day today, with the benchmark Sensex falling by more than 500 points within minutes of opening this morning, although some losses were recovered later.
The Sensex was trading 192 points down at 16,798.10, its lowest level in about 14 months.