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Informist, Thursday, Aug 8, 2024

--RBI Das: Global investor confidence on India is very positive

--RBI Das: Have enhanced resilience vs spillover from global shocks

--RBI Das: Global developments have implications for emerging markets

--RBI Das: Significant challenges to global growth outlook

--RBI Das: Near-term outlook on global growth looks positive

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--RBI Das: Global econ growth stable but expansion uneven

--RBI Das: India has improved resilience against external shocks

--RBI Das: RBI will be watchful of all domestic, external data

--RBI Das: Confident of meeting external requirements

--RBI Das: India's external sector resilient, key indicators strong

--RBI Das: External commercial loans moderated during Apr-Jun

--RBI Das: Improving global trade to aid external demand 

MUMBAI – Reserve Bank of India Governor Shaktikanta Das today said the country's current account deficit in Apr-Jun is expected to remain within sustainable levels. Overall, the current account deficit is expected to remain manageable in 2024-25 (Apr-Mar), he said.

According to Das, despite the widening merchandise trade deficit, buoyancy in services exports and strong remittance receipts would have kept the current account deficit in Apr-Jun under control. India's current account was in a surplus of 0.6% of GDP.

India's merchandise trade deficit in Apr-Jun rose 10.4% on year to $62.02 bln. In June, India's merchandise trade deficit widened to $20.98 bln in June, compared to a deficit of $19.19 bln a year ago, but lower than $22.98 bln in May. It was lower sequentially mainly on account of lower growth in oil imports.

Foreign direct investment inflows have risen so far in 2024-25 with gross FDI rising more than 20% in Apr-May, Das said. The governor said that since June, foreign portfolio investors have been net buyers in the domestic market, with net inflows of $9.7 bln from June till Tuesday. Also, external commercial borrowings moderated during April-June, while non-resident deposits recorded higher net inflows during April-May compared to the previous year.

"In 2024-25 so far up to Wednesday, the Indian rupee remained largely range-bound," Das said. "The lower volatility in the rupee bears testimony to India’s macroeconomic and financial stability, and an improving external sector outlook." A stable rupee boosts FPI confidence in the domestic economy and attracts greater investments. This was amidst the global financial market exhibiting volatility in the past few days.

He said improving prospects of global trade are expected to aid external demand. According to the International Monetary Fund's World Economic Outlook, global trade volume is forecast to grow 3.1% this year compared to 0.8% in 2023. The outlook for the global economy exhibits steady though uneven expansion, Das said, adding that the RBI would remain watchful of all data from the country as well as from around the globe.

Das also highlighted that the country's foreign exchange reserves hit a record high of $675 bln as of Friday. Rising reserves allow the RBI to control the fall in the rupee by selling dollars in the foreign exchange spot market. Due to rising reserves, the RBI remains confident of meeting any external financial obligations. "India’s external sector remains resilient as key indicators continue to improve," Das said.

India's external debt to GDP ratio fell to 18.7% at the end of March from 19% a year ago, with the net international investment position to GDP ratio improving to (-)10.3% from (-)11.3% during the same period.  End

US$1 = 83.96 rupees

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Reported by Sourabh Kumar

Edited by Rajeev Pai

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