The reserves rose to $501.70 billion helped by a whopping rise in foreign currency assets, the latest data from the Reserve Bank of India.
In absolute terms, the CAD stood at $4.6 billion in the current fourth quarter, compared with $13 billion in the year-ago quarter and $17.7 billion in the third quarter of fiscal year 2018-19.
Strong month-end demand for the US currency mainly from oil importers along with currency futures expiry related purchases predominantly weighed heavily on the forex market and haunted investor sentiment.
Illustration: Uttam Ghosh/Rediff.com After a brief respite at the year's start, FPIs have dumped shares worth more than $5.7 billion (Rs 42,596 crore), taking the cumulative net outflows since October to $10.5 billion (Rs 78,466 crore), and adding to the volatility on the bourses. The figure would have been a lot worse had it not been for net purchases to the tune of $5.7 billion in the primary market from October to date.
Thus far in FY21, BSE, NSE have rallied 70 per cent and 71 per cent, respectively.
India is among 75 countries with which Switzerland's Federal Tax Administration has exchanged information on financial accounts within the framework of global standards on Automatic Exchange of Information.
The rating outlook change is relevant now, as the US Federal Reserve is set to end its monthly bond-buying programme in October.
'The potential headwind is that the Indian economy is likely to see a slowdown in growth rates over the next two years.'
"According to the global financial services major, though CAD at 3.2 per cent of GDP is significantly lower than the 4.8 per cent it registered in fiscal year 2012-13 ", it still remains higher than the 2.4 per cent of GDP that we estimate as the optimal current account deficit".
The indices closed with losses for the week, with the Sensex declining 476.14 points, and the broader NSE Nifty falling 155.45 points during the period.
RBI will review the monetary policy again on September 29.
Finance Minister P Chidambaram on said that financing current account deficit (CAD) year after year is a challenge and the only way to deal with the problem is by increasing exports.
Participants are keeping an eye on the Winter Session of Parliament, which started today, and US fiscal policies to be followed by President-elect Donald Trump
Despite the 3 per cent gain in September 2019, the FPI sell-off during the quarter has seen the benchmark indices - the S&P BSE Sensex and the Nifty 50 register negative returns in Q3CY19.
BSE Sensex on Monday closed nearly 34 points higher at 26,350.17 with gains in realty, power, FMCG and oil & gas stocks amid sustained buying by domestic institutional investors.
Trading sentiment remained distinctly weak due to the cash crunch arising out of the government's move to demonetise Rs 500 and Rs 1,000 notes to flush out black money amid concerns about its impact on small and medium-sized businesses which largely run on cash.
Due to tax associations with the fiscal-ending, April is a month of SIP renewal. So, the April numbers will be important and may perhaps, mark a change in retail attitude.
There has been a decline in foreign direct inflow from China in the last three years, with FDI coming down to USD 163.77 million in 2019-20, Minister of State for Finance Anurag Singh Thakur informed the Lok Sabha on Monday. Giving details of the total foreign direct investment (FDI) inflow from Chinese companies in India, he said, it was USD 350.22 million in 2017-18, while it declined to USD 229 million in the following year.
After turning net buyers for the fifth straight month till June, foreign portfolio investors (FPIs) withdrew a net of Rs 11,743 crore ($1.7 billion) in July. This was their highest outflow since October 2018.
There is polarisation among sectors with IT and healthcare receiving the lion's share of FPI money in the past two quarters.
It is thought that the RBI has been accumulating dollars to fight odds.
NSE Nifty, after shuttling between 10,809.60 and 10,725.90, finished 30.95 points, or 0.29 per cent lower at 10,741.10.
'Money that came into mutual funds near the previous peaks -- the second half of 2017 and 2018 -- has in most cases experienced unflattering returns.' 'A large proportion of redemptions could be such inflows exiting when the market recovered sharply from July 2020 onwards.'
Foreign portfolio investors, on the other hand, have been net sellers in the markethaving pulled out Rs 8,600 crore
A referendum will be held on Thursday, June 23, to decide whether Britain should exit (Britain's exit, hence the term Brexit) or remain in the European Union.
The US currency's decline against major world currencies alongside fag-end dollar supply largely helped the rupee recoup some of its initial losses
The global brokerage firm believes that CRR cut is likely to help cut lending rates and revive growth sentiments.
Rating agency expects current account deficit to remain at a modest 1.4% at end of FY16 and stay at similar level till 2018
Indian capital markets joined the global sell-off sparked by China growth concerns
While a coordinated aggressive monetary easing from the central banks is most likely to offer some respite in the near-term, it is unlikely to improve the sentiments.
Foreign exchange reserves jumped $1.17 billion to touch a new record high of $355.46 billion.
In the longest losing streak of 2017, the BSE Sensex has lost 1,270 points, or 3.91 per cent. It fell to a three-month low of 31,154.03 on Wednesday.
'If the third wave of Covid infections is as bad as the second one, the market may get very polarised with a preference for blue-chips with low volatility.'
On Wednesday, FIIs sold shares worth Rs 1,573 crore.
Import duty on PVC, at 7.5%, is far lower than that prevailing in comparable economies.
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The rupee on Friday touched an all-time low of 62.03 to a dollar, spooking the equities market and dragging the Sensex down to 18,621.39 in the afternoon.
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Policymakers stepped in late Thursday to calm markets.
The three hour long meeting was attended by Secretaries of departments of Revenue, Expenditure, Financial services and Disinvestment.
India's current account deficit is expected to deteriorate in the current fiscal on account of costlier imports and tepid merchandise exports, according to the Finance Ministry's monthly economic review. The review released on Thursday by the ministry also said that global headwinds would continue to pose a downside risk to growth as crude oil and edibles, which have driven inflation in India, remain major imported components in the consumption basket. For the present, it said, "their global prices have softened, as fears of recession have dampened prices somewhat. This would weaken inflationary pressures in India and rein in inflation."
The V-shaped rebound has been aided by a gush of liquidity flooding the global financial system, thanks to balance sheet expansion.
