ANI
24 Jun 2022, 15:37 GMT+10
New Delhi [India], June 24 (ANI): India's current account deficit (CAD) is expected to widen and be in the range of 2.6 per cent to 2.8 per cent of gross domestic product (GDP) in the current financial year FY23, said brokerage and financial services firm Edelweiss Broking.
The high merchandise trade deficit coupled with the fund outflow from financial markets has weakened India's external account or balance of payment position.
Notably, foreign portfolio investors have been pulling out money from India for the past consecutive eighth-to-nine months.
"The country's balance of payment slipped into a deficit of $16 billion in Q4 FY22 for the first time in 13 quarters after recording a marginal surplus of $0.47 billion in Q3 FY22. For the financial year, although the BoP recorded a surplus of $47.5 billion, it was lower by $40 billion or 46 per cent than that in FY21 and the lowest in three years," the brokerage said.
This has implications for the Indian currency rupee, and the weakness in the rupee is to prevail, it said adding that it expects the rupee movement in the range of 77.5 to 79 over the next 2-3 months.
The lower foreign currency receipts compared with payments/outflows have been weighing down the Indian rupee which has depreciated by over 5 per cent since the start of 2022.
For FY22, the current account deficit came in at $38 billion or 1.2 per cent of GDP as against a surplus of $24 billion or 0.9 per cent of GDP in FY21, which was the highest in three years.
The widening of the current account deficit in FY22 was primarily due to the surge in the merchandise trade deficit which nearly doubled from that in the previous year to worth $189 billion owing to the higher imports of goods associated with the revival in economic activity and rise in global commodity prices, it added.
In terms of financial flows in FY22, net total foreign investment inflows of around $22 billion were 73 per cent lower than FY21. This was mainly due to the net foreign portfolio investments outflow to the tune of $16.8 billion, which is in sharp contrast to the net inflows of $36 billion in FY21. (ANI)
Get a daily dose of Nepal National news through our daily email, its complimentary and keeps you fully up to date with world and business news as well.
Publish news of your business, community or sports group, personnel appointments, major event and more by submitting a news release to Nepal National.
More InformationDETROIT, Michigan: Detroit's three big automakers - General Motors, Ford and Chrysler parent Stellantis NV - have announced that wearing ...
HONG KONG: To cope with the weakening property market, developers in China are coming up with innovative ways to attract ...
SYDNEY, NSW, Australia - Stocks in Asia made solid gains on Friday in a positive end to the week.In Japan, ...
BEIJING, China: Amidst warmer-than-normal weather, power consumption surged in the Chinese provinces north of the Yangtze river, with regions such ...
LONDON, England: Surging food prices in the UK pushed consumer price inflation to 9.1 percent last month, a 40-year record ...
HONG KONG: Impacted by strict quarantine rules that caused a 98 percent drop in passengers, executives from Hong Kong carrier ...
NEW DELHI, India: The European Union and India have relaunched talks to implement a free trade agreement, aimed to be ...
NEW DELHI, India: Industry sources have said that Air India is in talks with Airbus and Boeing for the possible ...
SHAN STATE, Myanmar - According to local sources, the vice-chair of a local branch of the Union Solidarity and Development ...
ISLAMABAD, Pakistan - The incumbent rulers should be imprisoned for "shamelessly" amending the National Accountability Bureau (NAB) laws, according to ...
KATHMANDU, Nepal - The Airlines Operators Association Nepal, an umbrella organization for private airlines, threatened to halt all services beginning ...
WASHINGTON D.C.: The U.S. State Department has called upon Vietnam to release environmental advocate Nguy Thi Khanh, adding that the ...