INSUBCONTINENT EXCLUSIVE:
to $16.9 billion in October-December, as the country's key external parameters weakened on higher imports and dollar outflows, Reserve
Bank of India data showed on Friday
The current account deficit stood at 2.5 per cent of the gross domestic product (GDP) in the December quarter, compared with $13.7 billion
or 2.1 per cent of GDP a year ago on the back of widening trade deficit worth $49.5 billion.Balance of payments, which represents the
difference between current account and capital account, slipped into a deficit of $4.3 billion in the December quarter from a surplus of
$9.4 billion a year ago, data showed.However, the numbers are expected to get better going ahead as dollar inflows have turned robust on
expectations of Prime Minister Narendra Modi winning a second term at the general elections that start next month."Foreign portfolio
outflows pressured BoP as well, even as pressures on current account deficit as well as capital account have eased appreciably lately," said
Abhishek Upadhyay, senior economist, ICICI Securities Primary Dealership in Mumbai.Stable oil prices are also expected to ease the current
account deficit in future and boost the rupee exchange rate, which was one of the worst performers in Asia in 2018 dented by a surge in oil
prices."Soft interest rates globally and expectations of a stable government post elections in India are expected to keep the foreign direct
inflows and portfolio inflows strong, which will keep the rupee stable," said Shubhada Rao, chief economist, YES Bank in Mumbai.The rupee
has gained 2.2 per cent in March, its highest since November on the back of strong dollar inflows into equities
The rupee has firmed by 0.90 per cent so far this year, recovering most of its lost ground from last year.The capital account surplus dived
to $13.6 billion in October-December from $16.7 billion in July-September period.Get the latest election news, live updates and election
schedule for Lok Sabha Elections 2019 on TheIndianSubcontinent.com/elections
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