Expanding CAD poses risks to rupee

News Snapshot:

India’s current account deficit (CAD) widened to $9.2 billion in the June quarter from $1.3 billion in the preceding three months, driven by a growing trade deficit, reduced net services surplus and decreased private transfer receipts, adding pressure on the local currency. The trade deficit, the largest component of the CAD, happens when a country’s imports exceed the value of its exports. The widening of the trade deficit comes amid a sharp decline in India’s merchandise exports due to slowing demand in Western countries and China. However, services exports have been on the rise, growing 22.8% in the March quarter,...