The present account deficit (CAD) will stay at a sustainable stage and the traditional flows will assist the Reserve Bank of India (RBI) to finance it, Governor Shaktikanta Das mentioned on Wednesday.
He additionally mentioned the Indian financial system is effectively positioned to take care of geopolitical challenges.
“We expect the current account deficit to remain at sustainable level and the normal flows will enable us to meet the financing of the current account deficit,” Das instructed reporters through the post-policy press convention.
The nation’s present account deficit elevated to USD 23 billion, or 2.7 per cent of GDP, within the third quarter of FY 2021-22 from USD 9.9 billion or 1.3 per cent of GDP within the second quarter and USD 2.2 billion (0.3 per cent of GDP) in Q3 of fiscal 2020-21.
The widening of CAD in Q3 FY22 was primarily on account of upper commerce deficit.
Das mentioned there was an increase in exports and imports.
“Higher exports are the good signs of the economy. Higher imports also augur well and it means that there is capital expenditure and investment which is taking place or is going to take place,” the Governor mentioned.
Talking in regards to the Indian financial system, he mentioned the nation is effectively positioned to take care of the challenges emanating from the geopolitical developments.
“The recovery is gaining traction and it is reflected in the fact that capacity utilisation has improved. Disbursal of bank credit is also picking up. Rural and urban demand are showing signs of further improvement. Overall macroeconomic numbers broadly look alright,” he famous.
Das additionally mentioned the Indian rupee is among the higher performing currencies amongst its rising market friends.
Source: www.financialexpress.com”