CURRENT UPDATE : CAD IN 2013-14 TO BE $56 BILLION : RBI GOVERNOR

CAD IN 2013-14 TO BE $56 BILLION : RBI GOVERNOR

Seeking to calm currency markets, the Reserve Bank today said the current account deficit in 2013-14 will be 56 billion USD which is much lower than the quantum projected earlier and there is no fundamental reason for rupee depreciation.

The RBI Governor Raghuram Rajan was today speaking at a hurriedly called press conference in Mumbai.He said now it is estimated that CAD this year will be USD 56 billion, less than 3 per cent of the GDP . He furter said some of that compression comes of RBI's strong measures to curb gold import.

The current account deficit had touched an all-time high of USD 88.2 billion in 2012-13. Earlier, the government had projected the CAD in the current fiscal at USD 70 billion, which was revised downwards to USD 60 billion by Finance Minister P Chidambaram on back of declining gold imports and recovery in exports.

Referring to the decline rupee value, the Governor said there was no fundamental reason for volatility in the exchange rate. He added on November 18, 2013 Apex would inject 8,000 crore Rs into the system to ease the liquidity situation. On interest rates, he said, the RBI would take a decision later taking into account various parameters. The RBI is scheduled to announce the next policy review on December 18.