<p>The Reserve Bank today said the Current Account Deficit (CAD) will moderate in the current fiscal on account softer global commodity prices and recent measures to dampen gold imports.<br /><br /></p>.<p>"Softer global commodity prices and recent measures to dampen gold imports are expected to moderate the CAD in 2013-14 from its level last year," the RBI said in its mid- quarter monetary policy review statement.<br /><br />The CAD, which is the difference between the outflow and inflow of foreign currency, is estimated to be around 5 per cent of the GDP in 2012-13 fiscal. <br /><br />The CAD had touched a record high of 6.7 per cent in the October-December quarter.<br /><br />RBI said trade deficit has widened in April-May due to surge in festival related or seasonal gold imports.<br /><br />"Available evidence suggests that a moderation in gold imports could be underway in June," the RBI said.<br /><br />According to the official data released today, trade deficit widened to USD 20.1 billion in May from USD 17.8 billion a month ago.<br /><br />Gold and silver imports rose nearly 90 per cent to USD 8.4 billion in May. Cumulatively, in April-May the import of precious metal stood at USD 15.88 billion.<br /><br />The government has hiked import duty on gold three times in a year and recently raised it by 2 per cent to 8 per cent to curb demand. Besides, the RBI too has put restrictions on banks on importing gold.<br /><br />The RBI said the main challenge is to reduce the CAD to a sustainable level and the near-term challenge is to finance it through stable flows.<br />Huge gold imports have put pressure on the country's CAD, which in turn is affecting the value of rupee.<br /><br />Finance Minister P Chidambaram last week had appealed to people not to buy gold and instead invest in financial instruments.<br />The high CAD is also putting pressure on the domestic currency which fell 5.8 per cent since January 1.</p>
<p>The Reserve Bank today said the Current Account Deficit (CAD) will moderate in the current fiscal on account softer global commodity prices and recent measures to dampen gold imports.<br /><br /></p>.<p>"Softer global commodity prices and recent measures to dampen gold imports are expected to moderate the CAD in 2013-14 from its level last year," the RBI said in its mid- quarter monetary policy review statement.<br /><br />The CAD, which is the difference between the outflow and inflow of foreign currency, is estimated to be around 5 per cent of the GDP in 2012-13 fiscal. <br /><br />The CAD had touched a record high of 6.7 per cent in the October-December quarter.<br /><br />RBI said trade deficit has widened in April-May due to surge in festival related or seasonal gold imports.<br /><br />"Available evidence suggests that a moderation in gold imports could be underway in June," the RBI said.<br /><br />According to the official data released today, trade deficit widened to USD 20.1 billion in May from USD 17.8 billion a month ago.<br /><br />Gold and silver imports rose nearly 90 per cent to USD 8.4 billion in May. Cumulatively, in April-May the import of precious metal stood at USD 15.88 billion.<br /><br />The government has hiked import duty on gold three times in a year and recently raised it by 2 per cent to 8 per cent to curb demand. Besides, the RBI too has put restrictions on banks on importing gold.<br /><br />The RBI said the main challenge is to reduce the CAD to a sustainable level and the near-term challenge is to finance it through stable flows.<br />Huge gold imports have put pressure on the country's CAD, which in turn is affecting the value of rupee.<br /><br />Finance Minister P Chidambaram last week had appealed to people not to buy gold and instead invest in financial instruments.<br />The high CAD is also putting pressure on the domestic currency which fell 5.8 per cent since January 1.</p>