Wednesday July 01, 2009
NEW DELHI: India's current account swung into a surplus in the March quarter, but it was not enough to prevent a wider deficit for the full 2008/09 fiscal year as oil imports rose and exports fell sharply due to the global slump. Analysts said portfolio inflows into local equities could help the rupee to appreciate gradually this year.
Foreign portfolio flows of a net $7.3 billion into local shares since mid-March have helped the local unit to rebound from a record low of 52.2 hit in early March. Central bank data on Tuesday showed current account deficit for 2008/09 (April/March) widened to $29.82 billion, or 2.6 percent of gross domestic product (GDP). It was $17.03 billion or 1.5 percent of GDP in the previous year.
India's current account surplus was at $4.75 billion in the March quarter, from a revised deficit of $13.03 billion in October-December, the central bank said on Tuesday. "Outlook for the balance of payments looks better in the current fiscal as trade deficit should still remain low while flows like portfolio inflows improve," said Anubhuti Sahay, an economist with Standard Chartered Bank.
The Reserve Bank of India said the balance of payments surplus in January-March was $300 million, compared with a deficit of $17.88 billion in the October-December quarter. The deficit was its widest in 18 years in the December quarter as the global crisis choked inflows, but the fall in oil prices since mid-2008 lowered the trade gap. India's total external debt slipped slightly to $229.9 million at the end of March, from $230.85 billion at the end of December.
"Given that trade financing remains weak and investment demand in the economy is yet to pick up, a significant increase in the trade deficit is not expected in FY10 despite higher oil prices," Sahay said. "Overall, the balance of payment numbers further reiterate our view on rupee where we expect it to appreciate gradually as we move further into 2009." India's exports have been falling since October as recession in developed economies slashed demand for Indian exports, while imports have also declined due to lower crude import costs and sluggish demand in a slowing economy.
(Reuters)
NEW DELHI: India's current account swung into a surplus in the March quarter, but it was not enough to prevent a wider deficit for the full 2008/09 fiscal year as oil imports rose and exports fell sharply due to the global slump. Analysts said portfolio inflows into local equities could help the rupee to appreciate gradually this year.
Foreign portfolio flows of a net $7.3 billion into local shares since mid-March have helped the local unit to rebound from a record low of 52.2 hit in early March. Central bank data on Tuesday showed current account deficit for 2008/09 (April/March) widened to $29.82 billion, or 2.6 percent of gross domestic product (GDP). It was $17.03 billion or 1.5 percent of GDP in the previous year.
India's current account surplus was at $4.75 billion in the March quarter, from a revised deficit of $13.03 billion in October-December, the central bank said on Tuesday. "Outlook for the balance of payments looks better in the current fiscal as trade deficit should still remain low while flows like portfolio inflows improve," said Anubhuti Sahay, an economist with Standard Chartered Bank.
The Reserve Bank of India said the balance of payments surplus in January-March was $300 million, compared with a deficit of $17.88 billion in the October-December quarter. The deficit was its widest in 18 years in the December quarter as the global crisis choked inflows, but the fall in oil prices since mid-2008 lowered the trade gap. India's total external debt slipped slightly to $229.9 million at the end of March, from $230.85 billion at the end of December.
"Given that trade financing remains weak and investment demand in the economy is yet to pick up, a significant increase in the trade deficit is not expected in FY10 despite higher oil prices," Sahay said. "Overall, the balance of payment numbers further reiterate our view on rupee where we expect it to appreciate gradually as we move further into 2009." India's exports have been falling since October as recession in developed economies slashed demand for Indian exports, while imports have also declined due to lower crude import costs and sluggish demand in a slowing economy.
(Reuters)
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