The CAD for the first three quarters of previous financial year stood at 2.7 per cent of GDP.
The CAD had narrowed significantly to 2.2 per cent in the October-December quarter from 3.7 per cent of GDP in the preceding three months owing to lower merchandise trade deficit and robust growth in services exports.
“Overall, our external sector indicators have improved significantly. Foreign exchange reserves have rebounded from USD 524.5 billion on October 21, 2022 and now stand in excess of USD 600 billion taking into account our forward assets,” said Das while announcing the key decisions of the Monetary Policy Committee (MPC) meeting.
Das said India’s services exports continued to grow at a healthy pace in the first two months of 2023.
Better growth prospects of the gulf cooperation council (GCC) countries are expected to keep remittances robust.
In fact, inward gross remittances touched an all-time high of USD 107.5 billion during calendar year 2022, he said. “The CAD is expected to remain moderate in Q4:2022-23 and in the year 2023-24 at a level that is both viable and eminently manageable,” said Das.
He further said the Indian Rupee has moved in an orderly manner in the calendar year 2022 and continues to be so in 2023 also.
This is reflective of the strength of domestic macroeconomic fundamentals and the resilience of the Indian economy to global spillovers.
RBI remains watchful and focused on maintaining stability of the Indian rupee, he added.
The rate-setting panel on Thursday unanimously decided to keep the repo rate unchanged at 6.5 per cent. India’s inflation forecast for this fiscal year (FY24) was cut to 5.2 per cent from 5.3 per cent forecast in February policy. Meanwhile, the MPC projected India’s real GDP to grow at 6.5 per cent in FY24.