India had a large trade deficit in the first quarter
The Economic Survey 2013-14, presented
today in the Lok Sabha by the Union Finance Minister Shri Arun Jaitley, has
noted that as India had a large trade deficit in the first quarter
The Economic Survey 2013-14, presented today on 9th July 2014
in the Lok Sabha by the Union Finance Minister Shri Arun Jaitley, has noted
that as India had a large trade deficit in the first quarter, negative market
perceptions led to sharper outflows in the foreign institutional investors
(FIIs) investment debt segment, leading to 13.0 per cent depreciation of the
rupee between May 2013 and August 2013. The government swiftly moved to correct
the situation through restrictions on non-essential imports like gold, custom
duty hike in gold and silver to a peak of 10 per cent, and measures to augment
capital flows through quasi-sovereign bonds and liberalization of external
commercial borrowings.
The RBI also put in place a special swap window for foreign currency non-resident deposit (banks) [(FCNR (B)] and banks’ overseas borrowings through which US$ 34 billion was mobilized. The one-off flows arrested the negative market sentiments on the rupee and, in tandem with improvements in the BoP position, led to a sharp correction in the exchange rate and a net accretion to reserves in 2013-14.
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