MUMBAI--India's current-account deficit widened in the April-June period from a year earlier, as gold imports surged and merchandise exports fell in Asia's third-largest economy.
The deficit expanded to $21.8 billion, or equal to 4.9% of gross domestic product, in the April-June quarter, compared with $16.9 billion a year earlier, the Reserve Bank of India said in a news release posted on its website Monday.
This coincided with heavy outflows from Indian stocks and bonds after the U.S. Federal Reserve in May indicated it might pare its monetary stimulus which has kept global markets flush with cash in recent years.
As a result, the Indian central bank had to use $300 million from the country's foreign-exchange reserves during the quarter to bridge the gap between outflows and inflows. Analysts say the wide current-account deficit is the biggest contributor to the Indian rupee's recent weakness.
The local currency fell about 22% from the beginning of May to a record low of 68.80 to the dollar on Aug. 28. Since then, the rupee has recovered due to steps taken by the RBI to boost capital inflows and after the U.S. Federal Reserve earlier this month left its borrowing program intact.
On Monday, the rupee ended local spot trading at 62.60 to the dollar, compared with 62.50 Friday.
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The deficit expanded to $21.8 billion, or equal to 4.9% of gross domestic product, in the April-June quarter, compared with $16.9 billion a year earlier, the Reserve Bank of India said in a news release posted on its website Monday.
This coincided with heavy outflows from Indian stocks and bonds after the U.S. Federal Reserve in May indicated it might pare its monetary stimulus which has kept global markets flush with cash in recent years.
As a result, the Indian central bank had to use $300 million from the country's foreign-exchange reserves during the quarter to bridge the gap between outflows and inflows. Analysts say the wide current-account deficit is the biggest contributor to the Indian rupee's recent weakness.
The local currency fell about 22% from the beginning of May to a record low of 68.80 to the dollar on Aug. 28. Since then, the rupee has recovered due to steps taken by the RBI to boost capital inflows and after the U.S. Federal Reserve earlier this month left its borrowing program intact.
On Monday, the rupee ended local spot trading at 62.60 to the dollar, compared with 62.50 Friday.
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