India stronger vs other EMs; narrowing CAD positive: Goetti

Reiterating global investors mood towards India, Hans Goetti, head of investment-Asia, Banque Internationale Luxembourg said that the country is in a strong position versus other emerging markets (EMs). In an interview to CNBC-TV18, he said that India's FII outflows are minor when compared to peers.

Most global investors were cautious about India’s high current account deficit. However, slew of measures taken by the Indian government and central bank RBI helped to bring CAD under control. CAD, which is the difference between the inflow and outflow of foreign exchange, stood at USD 88.2 billion in 2012-13. Pick up seen in exports and declining gold imports contributed to the improvement in CAD, which dropped to 1.2 percent in second quarter, as against 4.9 percent in the first quarter.  The finance minister P Chidambaram sees 2013-14 current account deficit (CAD) USD 45 billion. Goetti added that India's improving CAD is fundamentally a big positive.

Meanwhile, he said that barring shockingly poor US data, the Federal Reserve is likely to continue tapering its monetary stimulus.

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