Mumbai, Dec 30 (PTI) India's current account surplus moderated to USD 15.5 billion or 2.4 per cent of the GDP in the July-September quarter of the current fiscal, the RBI said on Wednesday.
The same was at USD 19.2 billion or 3.8 per cent of the GDP in the preceding three-month period on account of a rise in the merchandise trade deficit, the RBI said in a statement on 'Developments in India's Balance of Payments during the Second Quarter (July-September) of 2020-21'.
It is for the third consecutive quarter that India's current account remained in surplus. In the last quarter of 2019-20, the surplus was USD 0.6 billion.
Current account deficit/surplus reflects the difference between the outflow and inflow of foreign exchange in a country's current account.
A current account deficit of USD 7.6 billion or 1.1 per cent of the GDP was recorded in the second quarter of 2019-20.
India recorded a current account surplus of 3.1 per cent of the GDP in the first half of the fiscal as against a deficit of 1.6 per cent in the corresponding period of 2019-20. This was mainly on account of a sharp contraction in the trade deficit.
'The narrowing of the current account surplus in Q2 of 2020-21 was on account of a rise in the merchandise trade deficit to USD 14.8 billion from USD 10.8 billion in the preceding quarter,' the central bank said.
As per the RBI's release, net services receipts increased both sequentially and on a year-on-year basis, primarily on the back of higher net earnings from computer services.
Private transfer receipts, mainly representing remittances by Indians employed overseas, declined on a year-on-year basis but improved sequentially by 12 per cent to USD 20.4 billion in the July-September period of 2020-21.
Further, net foreign portfolio investment was USD 7 billion as compared to USD 2.5 billion in the second quarter of 2019-20, largely reflecting net purchases in the equity market.
With repayments exceeding fresh disbursals, external commercial borrowings to India recorded net outflow of USD 4.1 billion in the second quarter as against an inflow of USD 3.1 billion a year ago.
Also, there was an accretion of USD 31.6 billion to the foreign exchange reserves (on a Balance of Payments or BoP basis) as compared to USD 5.1 billion in the second quarter of 2019-20.
Regarding BoP during April-September 2020-21, RBI said net invisible receipts were lower in first half of 2020-21, mainly due to decline in net private transfer receipts.
'Net FDI inflows at USD 23.8 billion in H1 of 2020-21 were higher than USD 21.3 billion in H1 of 2019-20,' it said, and added portfolio investment recorded a net inflow of USD 7.6 billion in H1 of 2020-21, almost at the same level as a year ago.
In first half of the current fiscal, there was an accretion of USD 51.4 billion to the foreign exchange reserves (on a BoP basis).
In another statement on India's International Investment Position (IIP), RBI said net claims of non-residents on India declined by USD 4.6 billion during the quarter and stood at USD 339.1 billion at end-September 2020.
The decline in net claims was due to an increase of USD 53.4 billion in Indian residents' overseas financial assets vis-a-vis a lower increase of USD 48.8 billion in foreign-owned assets in India.
Appreciation of the Indian rupee against the US dollar during the quarter contributed to the increase in India's liabilities, when valued in US dollar terms. PTI NKD NKD ABM ABM