Q3 current account deficit flat at 1.4%

A decline in net invisibles receipts widened the current account deficit marginally to $7.9 billion, or 1.4 per cent of the gross domestic product (GDP), in October-December 2016 from $7.1 billion, or 1.4 per of the GDP, in the same quarter of the previous year.

The deficit rose from $3.4 billion, or 0.6 per cent of the GDP, in the July-September period.

Over April-December, the current account deficit narrowed on a contraction in the trade deficit to $11.6 billion, or 0.7 per cent of the GDP, from $21.6 billion, or 1.4 per cent of the GDP, in the corresponding period of 2015-16.

Net services receipts moderated in October-December owing to a fall in earnings from software, financial services and charges for intellectual property rights, the Reserve Bank of India (RBI) said in a statement on Thursday.

Private transfer receipts, representing remittances by Indians employed abroad, amounted to $15.2 billion, a 3.8 per cent decline from their level a year ago.

Net foreign direct investments at $9.8 billion were marginally lower than their level a year ago. Portfolio investment saw a net outflow of $11.3 billion during the quarter against a net inflow of $0.6 billion in the same period a year ago. Portfolio outflows occurred both in equity and debt.

Non-resident Indian (NRI) deposits declined by $18.5 billion during the quarter against an inflow of $1.6 billion in the same period a year ago.

Foreign exchange (Forex) reserves, on balance of payments basis, declined by $1.2 billion in October-December against a rise of $4.1 billion in the same quarter of the previous year. There was an accretion of $14.2 billion to forex reserves in April-December 2016 against a $14.6 billion addition in the same period a year earlier.