MUMBAI: Reserve Bank of India (RBI) Governor Shaktikanta Das on Friday said India’s current account deficit is ‘eminently manageable’. He said Indian economy is resilient and the country’s financial system is robust and stable, thanks to strong macro fundamentals.
“The average current account deficit to GDP ratio stands at 3.3% during the first half of financial year 2022-23. The slowing global demand is weighing on merchandise exports, but our exports of services and remittances remain strong,” said the Governor in his keynote address at a conference held in Dubai.
“The net balance under services and remittances remains in a large surplus, partly offsetting the trade deficit. Consequently, the current account deficit is eminently manageable and within the parameters of viability,” he said.
Talking about the high prices, he said inflation has come down though core inflation remains sticky and elevated. “In this hostile and uncertain international environment, the Indian economy remains resilient, drawing strength from its macroeconomic fundamentals. Our financial system remains robust and stable,” he said.
“Banks and corporates are healthier than before the crisis. Bank credit is growing in double digits. India is widely seen as a bright spot in an otherwise gloomy world,” he added. The size of forex reserves is comfortable and has gone up from $524 billion on October 21, 2022, to $572 billion as of January 13, 2023.” “India’s external debt ratios are low by international standards. This has enabled the central bank to eschew measures to control capital flows.”