India's current account deficit (CAD) at $15.8 billion during the first quarter ending June is higher compared with that in the same quarter a year ago and stood at 2.4 per cent of the GDP owing mainly to increased trade deficit, RBI data showed on Friday.
India’s current account deficit (CAD) at $15.8 billion during the first quarter ending June is higher compared with that in the same quarter a year ago and stood at 2.4 per cent of the GDP owing mainly to increased trade deficit, RBI data showed on Friday. As per the Reserve Bank of India’s (RBI) latest Balance of Payments (BoP) data, the country’s CAD in the same period a year ago stood at $15 billion.
“India’s CAD stood at $15.8 billion (2.4 per cent of GDP) in Q1 of 2018-19 compared with $15.0 billion (2.5 per cent of GDP) in Q1 of 2017-18,” the RBI said. “The widening of the CAD on a year-on-year (y-o-y) basis is primarily on account of a higher trade deficit at $45.7 billion compared with $41.9 billion a year ago.”
High global crude oil prices that have added to the trade deficit, along with fears over an escalation in the trade war and outflows of foreign funds from the country’s equity market segment, pulled the Indian rupee to a new record low of 72.11 per US dollar on Thursday.
“Net services receipts increased by 2.1 per cent on a y-o-y basis mainly on the back of a rise in net earnings from software and financial services,” the central bank said. “Private transfer receipts, mainly representing remittances by Indians employed overseas, amounted to $18.8 billion, increasing by 16.9 per cent from their level a year ago.” it added.
In the financial account, net foreign direct investment (FDI) stood at $9.7 billion in the quarter in consideration, higher than $7.1 billion in the first quarter of 2017-18. The data disclosed, however, that net outflow of portfolio investment was $8.1 billion as against a net inflow of $12.5 billion during the same quarter last year on account of net sales in both the debt and equity markets.
“Net receipts on account of non-resident deposits amounted to $3.5 billion in Q1 of 2018-19 compared with $1.2 billion a year ago,” the RBI said. On a BoP basis during the April-June quarter, there was a depletion in foreign exchange reserves of $11.3 billion, as against an accretion of $11.4 billion in the like quarter of 2017-18, it added.