Unfazed by the worsening current account deficit (CAD) situation, the Government on Thursday reaffirmed commitment to bring it down over time and ensure it is financed safely.
Reacting to the CAD number of 6.7 per cent of GDP for the third quarter (October-December 2012), the Finance Ministry said in a statement here that “though this number is large yet (it is) not surprising”.
Although the number is large, yet it is a matter of satisfaction that it has been fully financed without drawing upon the foreign exchange reserves, the statement said.
“Going forward too, we hope to be able to finance the CAD through sufficient foreign inflows.”
If the current trend of improvement in exports and steadiness in imports persists, the CAD is likely to moderate from here, according to the Finance Ministry.
The CAD for the fourth quarter is expected to be smaller, the statement added.
“Both the RBI and the Government will continue to monitor the CAD and will take additional steps whenever warranted.”