Q2 CAD dips 75% to $5.2 billion
3 Dec 2013 11:36 PM GMT
The CAD, the difference between outflows and inflows of foreign exchange, was $21 billion, or 5 per cent of GDP, in the second quarter of the previous fiscal (2012-13).
‘A contraction in the trade deficit, coupled with a rise in net invisibles receipts, resulted in a reduction of the CAD to $26.9 billion (3.1 per cent of GDP) in the first half of 2013-14 from $37.9 billion (4.5 per cent of GDP) in H1 of 2012-13,’ the Reserve Bank of India (RBI), the country’s central bank, said in a statement.
Notwithstanding a lower CAD during H1 (April-September) of 2013-14, there was a drawdown of foreign exchange reserve to the tune of $10.7 billion against an accretion of $400 million in same period of the previous fiscal mainly due to a decline in net capital inflows under the financial account, the RBI added.
Both the government and RBI are expecting the CAD to be below $56 billion in the current fiscal compared to the record high $88.2 billion, or 4.8 per cent of GDP, in the last fiscal. Besides a pick-up in exports, the steps taken by the RBI and Government have resulted in a decline in gold imports, which was one of the main contributors to high CAD last year.
‘A contraction in the trade deficit, coupled with a rise in net invisibles receipts, resulted in a reduction of the CAD to $26.9 billion (3.1 per cent of GDP) in the first half of 2013-14 from $37.9 billion (4.5 per cent of GDP) in H1 of 2012-13,’ the Reserve Bank of India (RBI), the country’s central bank, said in a statement.
Notwithstanding a lower CAD during H1 (April-September) of 2013-14, there was a drawdown of foreign exchange reserve to the tune of $10.7 billion against an accretion of $400 million in same period of the previous fiscal mainly due to a decline in net capital inflows under the financial account, the RBI added.
Both the government and RBI are expecting the CAD to be below $56 billion in the current fiscal compared to the record high $88.2 billion, or 4.8 per cent of GDP, in the last fiscal. Besides a pick-up in exports, the steps taken by the RBI and Government have resulted in a decline in gold imports, which was one of the main contributors to high CAD last year.
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