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Journalism of Courage
The current account surplus moderated to $15.5 billion (2.4 per cent of GDP) in the quarter ended September of 2020-21 from $19.2 billion (3.8 per cent of GDP) in the first quarter this fiscal. According to the RBI, a deficit of $7.6 billion (1.1 per cent of GDP) was recorded a year ago — Q2 of 2019-20.
The narrowing of the current account surplus in Q2 of FY21 was on account of a rise in the merchandise trade deficit to $14.8 billion from $10.8 billion in the preceding quarter, the Reserve Bank of India (RBI) said.
The central bank further said net outgo from the primary income account, primarily reflecting net overseas investment income payments, increased to $9.3 billion from $8.8 billion a year ago.
In the financial account, net foreign direct investment (FDI) recorded robust inflow of $24.6 billion as against $7.3 billion in the second quarter of 2019-20.
Net foreign portfolio investment (FPI) was $7 billion as compared with $2.5 billion in Q2FY20, largely reflecting net purchases in the equity market. With repayments exceeding fresh disbursals, external commercial borrowings to India recorded net outflow of $4.1 billion in Q2 of 2020-21 as against an inflow of $3.1 billion a year ago, the RBI added.
Net accretions to non-resident deposits moderated to $1.9 billion from $2.3 billion in the second quarter last fiscal. There was an accretion of $31.6 billion to the foreign exchange reserves (on a BoP basis) as compared with that of $5.1 billion in Q2 of 2019-20.
The country recorded a current account surplus of 3.1 per cent of gross domestic product (GDP) in the first half this fiscal as against a deficit of 1.6 per cent in H1 of 2019-20.
