Government and Reserve Bank to take steps to arrest the fall of the currency.
There were also concerns over whether a depreciating rupee would increase the fiscal deficit by increasing expenditure on subsidies and jeopardise the repayment schedule for external commercial borrowings.
For all the worries among investors and policymakers over the rupee's sudden plunge to record lows, the Indian economy is in better shape to handle a depreciation than it was when the currency last hit the buffers a year ago.
Indian exporters on Monday said the fluctuating rupee will not only raise imports bill but would also lead to volatility affecting their businesses.
The rupee on Monday plunged by 48 paise to hit its life-time low of Rs 57.54 in early trade on heavy dollar demand and the US currency strengthening against major rivals overseas.
If the administrative/regulatory/judicial logjam can be loosened, there could be a quick yield in higher output, which would have multiplier constraint-loosening effects on the economy as well as lead to higher savings, a critical prerequisite for reducing the domestic savings-gap and thus help reduced the unsustainably high CAD.
The majority view remains for the central bank to leave the cash reserve ratio unchanged at 4 per cent.
Delay in the tapering of the $85 billion-a-month bond buyback programme by the US Fed (tapering will start from January 1) gave the country time to replenish the forex reserves and rein in the high current account gap.
Despite a high current account deficit (CAD) and lower interest rates abroad, the Union government will not go for a sovereign bond issue to get more dollars.
With India faced with high Current Account Deficit, FM has been visiting major global financial hubs like Japan, Germany, Hong Kong and Singapore, to project the country as a investment destination.
RBI is scheduled to announce the monetary policy for the current financial year on May 3 during which it will take a call on interest rates keeping in view the inflation and other macro-economic parameters like growth rate, industrial production etc.
The ballooning of crude prices has significantly increased the country's oil import bill and it can also lead to a worsening of the current account deficit and fiscal deficit for the domestic economy.
Looks at sovereign funds and Fortune 500 firms.
RBI Governor Rajan on Wednesday said significant progress made in curbing current account deficit.
The Budget tried to please politicians, rating agencies and reformists, and let them all down -- slightly.
On the Budget day, when the Finance Minister reads through reams of paper, the common man is often left confused. Worse still, there are a whole lot of numbers and jargons like capital account expenditure and current account deficit that could baffle many.
The Reserve Bank too imposed a series of curbs to restrict gold imports.
RBI's 50-bps cut can be construed as the central bank tactically using this narrow window of opportunity -- when inflation has gapped down -- to frontload the rate cuts intended for the year, knowing opportunities may not come by later.
Making a case for raising prices of diesel, kerosene and LPG, the Reserve Bank on Tuesday said hike in rates of petroleum products is necessary to arrest fiscal slippages.
RBI has sent letters to the country's richest temples asking for details of their gold.
>According to the latest RBI data, PPF receipts have already experienced a decline between April 2023 and February 2024. Other schemes like the Sukanya Samriddhi Account and National Savings Certificate are also witnessing reduced inflows.
The finance ministry is considering raising import duty on gold by two percentage points to six per cent, as the surge in demand for the yellow metal threatens to further widen India's current account deficit.
'We have relatively strong growth and a healthy corporate earnings cycle as positives, but a worrisome current account deficit and high inflation as challenges.'
India's balance of payments for the first quarter of this fiscal showed a three-fold increase in deficit in trade balance at $15.8 billion against $5.1 billion in the same period last fiscal.
International oil prices retreated from an over seven-year high but was still above $100 a barrel and continue to pose threat to India's inflation rate and current account deficit. While there are no supply concerns as the oil route remained open, consumers will feel the pinch when PSU oil firms start passing on the increase in international rates through a revision in petrol and diesel prices, which have been on a pause for over three-and-a-half-months in view of elections in Uttar Pradesh and four other states. The government is "closely monitoring the situation" and will "take appropriate steps as and when required", a top official said. Brent crude oil surged past $105 per barrel on Thursday for the first time since August 2014, following Russia's invasion of Ukraine.
The CAD, which represents the difference between exports and imports after considering cash remittances and payment, widened to a record high of 5.4 per cent of gross domestic product, or $22.3 billion, in the July-September quarter.
The rupee appreciated 7 paise to 79.74 against the US dollar in early trade on Thursday as a positive trend in domestic equities supported the local unit. However, a strong American currency overseas and forex outflows restricted the rupee's gain, dealers said. At the interbank foreign exchange, the rupee opened at 79.72 against the American dollar, then went lower to trade at 79.74 against the greenback in early deals, registering a gain of 7 paise over the last close.
The Union government's fiscal deficit further widened to Rs 9.53 lakh crore, which is nearly 120 per cent of the annual budget estimate, at the end of October of the current financial year, according to official data released on Friday. The deficit widened mainly on account of poor revenue realisation. The lockdown imposed to curb spreading of coronavirus infections had significantly impacted business activities and in turn contributed to sluggish revenue realisation.
Importing gold widens current account deficit, channels domestic savings into personal investments and of course forces domestic entrepreneurs to scout for foreign funds, writes M R Venkatesh.
Chidambaram said banks have been asked to strictly adhere to the norms on gold imports.
Amid all the gloom on the economic and financial front, Sandesh Kirkire, CEO, Kotak MF, suggests five bold measures to get the Indian economy back on the growth path, arrest the rupee's downfall and address India's bulging current account deficit.
When the outflows are more than the inflows, a deficit occurs in the current account of the nation, which is widely known as the Current Account Deficit.
A heavy dependence on imported energy, gold and technology means India has historically run a current account deficit, which it has funded by attracting foreign money into stocks, bonds and corporate investment.
Amid rupee sliding below 64 to a dollar, global agency Standard & Poor's on Tuesday said it will maintain negative outlook for the country as currency depreciation is adversely impacting investor confidence.
Multiple concerns have, of late, raised questions about India's continuing growth story. Persisting high inflation threatened a hard landing for India's economy, says Shikha Sharma.
RBI has permitted Axis Bank, Kotak Mahindra Bank, IndusInd Bank and Yes Bank to import gold.
A rapidly deteriorating balance of payments may warrant that but the political climate is too risky
Modi said that for nearly one and a half years he has been putting in place details of new schemes to give new pace to the country's development and curb poverty.
The Vijay Kelkar committee has cautioned that India's current account deficit (CAD) might rise to a record 4.3 per cent of gross domestic product (GDP) in 2012-13 if reforms to address this do not take place.
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