According to The Reserve Bank of India (RBI), the Current Account Deficit (CAD) rose to $78.2 billion (4.2 per cent of gross domestic product (GDP)) in 2011-12 from $ 46 billion (2.7 per cent of GDP) in 2010-11, “largely reflecting higher trade deficit on account of subdued external demand and relatively inelastic imports of oil and gold and silver”.
It also said that foreign exchange reserves declined by $12.8 billion for the year ended March 31, 2012, against an increase of $13.1 billion during the previous year.
“The stress witnessed in India’s Balance of Payments (BoP) in the third quarter continued during the fourth quarter of 2011-12 as well due to large increase in imports,” the RBI said.
It also said that foreign exchange reserves declined by $12.8 billion for the year ended March 31, 2012, against an increase of $13.1 billion during the previous year.
“The stress witnessed in India’s Balance of Payments (BoP) in the third quarter continued during the fourth quarter of 2011-12 as well due to large increase in imports,” the RBI said.
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