We will finance CAD without dipping into forex kitty: FM
17 July 2013 10:34 PM GMT
Finance Minister P Chidambaram on Tuesday assured investors that the current account deficit (CAD) would be financed without dipping into forex reserves. The minister also promised more policy decisions in the coming days, saying ‘reforms is a work in progress’. He was addressing a venture capitalists and private equity (PE) funds.
Referring to inflation, Chidambaram said that the government has taken steps and more measures will be taken on the supply side bottlenecks to moderate it. ‘But I can’t promise you zero inflation.... If crude oil prices do not spike up again, we can contain inflation to a tolerable level,’ Chidambaram said. On CAD, he said that the deficit was financed last fiscal (2012-13) without dipping into the country’s forex reserves and this year, too, it would be contained below the 2012-13 level of 4.8 per cent of gross domestic product (GDP).
‘At the end of the year 2012-13, we not only financed the CAD but also added $3.8 billion to our reserves. This year the current account deficit looms large,’ noted Chidambaram.
‘We are doing our sums and we are confident that with some stern measures that we have taken and we will take, we can contain the current account deficit to a level below last year’s CAD. We will finance it fully and safely without running down reserves,’ he assured the gathering.
Referring to inflation, Chidambaram said that the government has taken steps and more measures will be taken on the supply side bottlenecks to moderate it. ‘But I can’t promise you zero inflation.... If crude oil prices do not spike up again, we can contain inflation to a tolerable level,’ Chidambaram said. On CAD, he said that the deficit was financed last fiscal (2012-13) without dipping into the country’s forex reserves and this year, too, it would be contained below the 2012-13 level of 4.8 per cent of gross domestic product (GDP).
‘At the end of the year 2012-13, we not only financed the CAD but also added $3.8 billion to our reserves. This year the current account deficit looms large,’ noted Chidambaram.
‘We are doing our sums and we are confident that with some stern measures that we have taken and we will take, we can contain the current account deficit to a level below last year’s CAD. We will finance it fully and safely without running down reserves,’ he assured the gathering.
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