Speaking exclusively to CNBC-TV18 Former RBI Governor YV Reddy said that the institutional identity of the banking regulator has been damaged. It is a full-service central bank, he said, adding that the emphasis is only on the monetary policy.
Persistently, low oil prices have affected overseas workers‘ income. About half of India‘s USD 70 billion-odd NRI remittances originate from the Gulf countries, the region worst affected by record-low crude oil prices and subdued global economic activity.
Import of services too fell by 8.9 per cent to USD 7.19 billion during the month, as compared with USD 7.89 billion in February 2015, as per the RBI data on International Trade in Services.
The BoP surplus in the October-December quarter stood at USD 4.1 billion against USD 13.2 billion year-on-year, according to RBI.
Earlier in the session, the rupee weakened to as much as 67.2550 to the dollar, a level last seen in September 2013, when the country suffered its worst market turmoil since the 1991 balance of payments crisis
The country's current account deficit (CAD), or the difference in the value of goods and services exported and imported, widened from USD 6.2 billion in the first quarter (1.2 percent of gross domestic product) of the fiscal year to USD 8.2 billion (1.6 percent of GDP) in the second.
According to the the data of Department of Industrial Policy and Promotion (DIPP) the top 10 sectors that receive maximum foreign investment include services, automobiles, telecommunication, computer software and hardware and pharmaceuticals.
Sanju Verma, CEO of Violet Arc Global Managers says it is not the defensives that are truly driving the market. Stocks like Ashok Leyland and Maruti, among others, have seen the most run-up in their stock prices, she adds.
Jahangir Aziz, chief economist at JPMorgan credits Rajan's success to the steps taken for inflation targeting. He says this is perhaps India's first big chance of breaking the inflation challenge. However, he cautions that rates at the moment are not high enough to meet FY15 inflation target.
A separate plan to explore joining Euroclear, the world's largest securities settlement system, has also been deferred until the next government takes charge after elections in April and May. That plan could have further opened up the market to portfolio capital inflows.
Preliminary balance of payments data published on Monday showed that the current account deficit fell to USD 5.2 billion in the July-September quarter of 2013-14, or 1.2 percent of GDP.
Despite a fall on Monday, the rupee is on course for its best month in a year.
Succeeding D Subbarao as the RBI Governor, Raghuram Rajan's immediate challenge will lie in restoring confidence in the rupee, which has been subject to consistent freefall.
A heavy dependence on imported energy, gold and technology means India has historically run a current account deficit, which it has funded by attracting foreign money into stocks, bonds and corporate investment
A Reuters poll had forecast the March quarter current account deficit at USD 21.59 billion, or 4.4 percent of GDP.
India's current account deficit (CAD) moderated sharply to 3.6 percent of GDP in Q4 of 2012-13 from a historically high level of 6.7 percent in Q3 of 2012-13 as trade deficit narrowed.
Sanjay Shah of Morgan Stanley told CNBC-TV18 that liquidity in the Indian market will be better overall in H2FY14. He added that the depreciating rupee was not a matter of concern and is set to improve from here.
The Reserve Bank can buy USD 9 billion according to the balance of payments estimates and after assuming the Brent crude to be at USD 110 a barrel.
Samiran Chakrabarty of Standard Chartered Bank shared his reading and outlook on current account deficit number for Q3.
Even as the market appears to rejoicing over the recent burst of â€œreformsâ€ by the government, Kotak Securities is of the view that some of the recent decisions will only postpone or even compound the real challenges facing the economy.
The current account registered an improvement in the first quarter (April-June) of FY13 over Q1 FY12, with current account deficit (CAD) declining to US$ 16.4 billion, from US$ 17.4 billion.
The risk of balance of payments (BoP) stress remains high, says Chetan Ahya, Morgan Stanley.
Ananth Narayan, MD, global markets & co-head of wholesale banking, South Asia, Standard Chartered Bank says there are many headwinds for the rupee to deal with right now, especially, India‘s spiraling current deficit which is leaving many foreign investors nervous.
India's current account deficit is expected to touch 4% of GDP in the 2011-12 fiscal year that ended in March, the worst in at least eight years because of a widening trade gap, Trade Secretary Rahul Khullar said on Thursday.
India's deficits and short-term debt levels are 'disturbing,' but it is not facing a repeat of a 1991 balance of payments crisis, Reserve Bank of India chief Duvvuri Subbarao said on Saturday.