CAD widens to $15.8 b in Q1FY19

CAD widens to $15.8 b in Q1FY19

India's current account deficit (CAD) widened to $15.8 billion in April-June quarter of 2018-19 from $ 15 billion in the same period last year.

The widening of the CAD on a year-on-year basis was primarily on account of a higher trade deficit at $ 45.7 billion as compared with $ 41.9 billion a year ago, the Reserve Bank of India (RBI) said in the data release.

In percentage terms, however, the CAD dipped marginally to 2.4% from 2.5% in the first quarter of the previous fiscal. The CAD essentially means a country buys more goods and services than it sells.

The RBI said net foreign direct investment at increased to $9.7 billion in the April-June in the current fiscal from $7.1 billion in the same period last year.

Portfolio investment recorded a net outflow of $8.1 billion in the period under review as against an inflow of $ 12.5 billion in the same period last year. This is due to net sales in the debt and equity markets.

Net receipts on account of non-resident deposits amounted to $3.5 billion in Q1 of 2018-19 as compared with $1.2 billion a year ago, the RBI said.

Net services receipts increased by 2.1% year-on-year mainly on the back of a rise in net earnings from software and financial services.

Private transfer receipts, mainly representing remittances by Indians employed overseas, amounted to $18.8 billion, increasing by 16.9% their level a year ago.

However, ther was a depletion of $11.3 billion of the foreign exchange reserves (on BoP basis) in the first quarter as against an accretion of $11.4 billion in the year-ago period, the RBI said.