CURRENT ACCOUNT DEFICIT
FPI exodus continues, Rs 62,800 cr pulled out from equities in first fortnight of June
Foreign investors continue to sell Indian shares. They have withdrawn over Rs 62,853 crore in early June. This follows significant outflows in previous months. Geopolitical tensions and global growth worries are driving these sales. The weakening rupee also plays a role. However, the pace of selling eased recently. Investors are seeking safety in developed markets.
FCNR(B): Revisiting a proven crisis management tool
Facing renewed external sector pressures, the RBI has revived a version of the FCNR(B) deposit framework to attract foreign currency inflows and support the rupee. While effective for near-term stability, experts say long-term resilience requires reducing structural vulnerabilities and import dependence.
India's retail inflation quickens to 3.93% in May amid high food & fuel prices
India's retail inflation rose to 3.93% in May. Food and fuel prices increased, impacting consumer costs. This marks the highest inflation reading under the new CPI series. Despite the rise, inflation stays below the Reserve Bank of India's 4% target for the 16th month. Policymakers have room to support growth.
ETMarkets Smart Talk| RBI's rate-cut cycle may be over; bond index inclusion could bring $25 billion: DSP MF's Sandeep Yadav
Sandeep Yadav of DSP Mutual Fund believes the RBI's rate-cut cycle may be nearing its end as inflation risks remain elevated. He expects India's inclusion in global bond indices to attract over $25 billion in debt inflows over time, while cautioning that such flows may offer only temporary support to the rupee.
Why the G7 is worried about global economic imbalances
In a pivotal discussion at the G7 summit, France is highlighting urgent concerns about the global economic landscape. China's robust exports contrast sharply with the U.S.'s mounting deficits, while Europe's investments appear to be lagging. These inconsistencies pose risks for escalating trade disputes and financial unrest.
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Suez Canal sees oil tanker surge amid Strait of Hormuz disruption
Egypt's Suez Canal saw a significant rise in oil tanker traffic and revenue in April. This surge is linked to the closure of the Strait of Hormuz, forcing ships to use the Red Sea route. Broader vessel traffic also increased. This unexpected boost benefits Egypt's foreign exchange earnings, though overall figures remain below pre-war levels.
Rupee to average around 96/USD in FY27; risks from oil, dollar persist: Motilal Oswal
The Indian rupee is projected to average around 96 against the US dollar in FY27. However, this outlook faces potential challenges including dollar strength and crude oil price fluctuations. Despite a widening trade deficit, strong capital inflows and RBI intervention are expected to prevent a sharp depreciation.
India's current account deficit to remain 1.5-1.7% of GDP in FY27 but RBI measures may turn BoP surplus: SBI Report
India's current account deficit is projected for FY27. However, Reserve Bank of India measures are anticipated to improve the country's external position. These steps aim to strengthen the Rupee and attract foreign capital. This could lead to a balance of payments surplus for FY27. Inflows are expected to boost foreign exchange reserves and banking system liquidity.
India's current account deficit to stand at 1.8% of GDP for FY27: ICICI Bank Global Market Report
India is expected to see a current account deficit of 1.8 per cent of GDP in FY27 as against around 2 per cent projected earlier. This adjustment follows a stable outturn in the external sector during the preceding fiscal year despite a widening trade deficit.
12 years of PM Modi: India should not only be resilient but also be antifragile
India faces significant global uncertainty and external challenges. Despite strong economic growth and improved financial stability, domestic investment remains a concern. The nation's resilience is being tested by fluctuating oil prices and global protectionism. Prime Minister Modi's leadership and the collective will of India are crucial as the country navigates these complex times.
RBI measures likely to attract USD 55-65 billion inflows in FY27: SBI report
India anticipates USD 55-65 billion in foreign inflows this fiscal year. The Reserve Bank of India's recent measures aim to stabilize the rupee and boost the country's balance of payments. These initiatives are expected to attract more foreign capital and deepen the domestic debt market. The overall balance of payments is projected to be in surplus for FY27.
From tax exemption to FCNR(B) deposits: How India is trying to attract foreign capital
India is taking steps to attract foreign investment and boost its economy. The Reserve Bank of India and the government have introduced new measures. These aim to bring in more dollars and stabilize the rupee. The initiatives include special swap facilities and tax exemptions for foreign investors. These actions are designed to make Indian markets more appealing to overseas capital.
Rupee gains as oil retreat soothes, inflow expectations erode weakening bias
The Indian Rupee strengthened on Tuesday due to falling oil prices. Regulatory measures are expected to reduce India's balance of payments deficit. Asian currencies also saw gains. Brent crude prices dropped after Iran and Israel halted attacks. Elevated oil prices pose risks to India's economy.
What's brewing? FinMin seeks gold lending info from banks
In a communique to banks on Friday evening, the Department of Financial Services sought data on value and quantity of gold metal loans (GMLs), number of customers, international gold suppliers as well as portfolio size, quantum of collateral and numbers of borrowers, two persons told ET.
India's Q4 FY26 current account surplus at $7.1 bln, driven by services exports, remittances
India achieved a $7.1 billion current account surplus in the fourth quarter of the last fiscal year. This positive outcome was driven by strong service sector earnings and increased remittances from overseas workers. While a welcome surprise, this surplus was lower than the previous year's figure.
India's current account surplus at $7.1 bn in Q4 FY26, aided by robust services exports and remittances
India achieved a current account surplus of $7.1 billion in Q4 FY26, driven by robust services exports and remittances. Despite a growing merchandise trade deficit, the external sector saw this surplus, though it was lower than the previous year's $13.7 billion.
India bonds slip as US-Iran risks derail post-policy rally
Indian government bonds faced pressure early Monday. Escalating U.S.-Iran tensions pushed oil prices higher. This overshadowed recent supportive measures from the Reserve Bank of India. The central bank had announced steps to boost foreign investment in government securities. Higher oil prices impact India's inflation and current account deficit. Bond yields moved inversely to prices.
ICICI Prudential Mutual Fund restricts subscription in ICICI Prudential Gold ETF
ICICI Prudential Mutual Fund has restricted subscriptions exceeding Rs 25 crore in its Gold ETF, becoming the second fund house to do so after HDFC Mutual Fund. This move aims to curb excessive financialization of gold at elevated prices, potentially impacting India's current account deficit and rupee. Investors are advised to consider profit booking and avoid fresh lump-sum allocations.
HDFC Mutual Fund limits subscription in its gold ETF and FoF. What this means for investors?
HDFC Mutual Fund has temporarily restricted large lump-sum investments in its Gold ETF and Gold ETF Fund of Fund amid surging gold prices and rising inflows. While SIPs remain unaffected, the move aims to curb excessive exposure to gold, which experts warn could worsen India's import bill and current account deficit.
Rupee inches up, defies Asian peers; caution prevails before RBI policy
The Indian rupee strengthened on Friday, defying subdued Asian markets ahead of a key policy decision. While a currency trader noted flow-driven adjustments, overall caution prevails as the Reserve Bank of India prepares to announce its policy, with markets watching for potential rate hikes amid inflation and currency pressures.
India’s long-term growth story intact despite high valuations: Citigroup CEO Jane Fraser
India's economy faces temporary global challenges. Citigroup CEO Jane Fraser states the nation's strong tech talent and diverse economy ensure its long-term growth. Foreign investors are reassessing valuations and risks. Despite current market volatility, India's fundamental economic story remains robust. The world's multipolar shift is seen as beneficial for India.
Consumption demand faces risk from global headwinds, parliamentary panel informed
Indian officials have warned that consumption demand might face challenges due to global economic pressures. However, strong service exports and foreign exchange reserves are expected to provide a buffer against external shocks. While inflation and currency volatility are concerns, India's economy is showing resilience. Government spending is increasing, but private investment needs a boost.
OECD sees India growth slowing to 6.3% from 7.6% in FY27
India's economy faces a slowdown to 6.3% in fiscal 2027. Higher energy costs from the Middle East conflict will impact investment and exports. Despite this, India remains a top global growth engine. Private consumption and investment are expected to moderate. Inflation will rise before easing. Global growth also slows.
Government denies new report stating RBI may have sold $12 billion gold to rescue rupee
Reports claiming the Reserve Bank of India sold gold to support the rupee have been denied by the Indian government. Official data shows India's gold reserves have actually increased. The Reserve Bank of India's share of gold in its foreign exchange reserves rose significantly between September 2025 and May 2026. This contradicts claims of gold sales to manage currency decline.
India's CPI inflation expected to rise to 4.8% with crude oil averaging USD 90/bbl in FY27: Report
Forecasts indicate that by FY27, India’s inflation could hit 4.8%, driven by crude oil prices projected at USD 90 per barrel. Factors such as the ongoing conflict in West Asia and a less favorable monsoon outlook are pivotal. Economic growth might taper to 6.3%, with both fiscal and current account deficits expected to increase.
Raise it, regulators: A repo rate hike - 50 bps increase to 5.75 perhaps - will reduce CAD, incentivise capital flows
India's monetary policy committee faces a complex decision. Delayed economic growth data and an unknown US Federal Reserve policy create significant challenges. Inflation is rising while growth slows. The committee must navigate these uncertainties to set interest rates. The government is already taking steps to manage the economy. The committee's decision will impact the country's financial future.
Energy prices, current account deficit, balance of payments big priorities right now: CEA
Managing macroeconomic fundamentals like balance of payments and current account deficit is a top priority for the government. The West Asia conflict has caused a global energy shock. Chief economic advisor V Anantha Nageswaran highlighted this urgency. He also spoke on securitisation and microfinance thresholds. Priority Sector Lending mandates are boosting volumes for the industry.
West Asia conflict a stagflationary shock; world economy not ready for a long war: Bank of America
The West Asia conflict has triggered a stagflationary shock, impacting global growth and inflation. Bank of America forecasts a lower global growth projection, with disruptions in the Strait of Hormuz being a critical factor. Oil prices are expected to remain elevated, impacting energy importers, while central banks face difficult decisions.
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