India's current account deficit narrows to $1.4 bln in December quarter

India's current account deficit narrowed sharply to USD 1.4 billion or 0.2 per cent of GDP in the December quarter, the Reserve Bank said on Thursday. The deficit was at 2.7 per cent of the GDP in the year-ago period and 0.9 per cent in the preceding quarter.

The sharp contraction was primarily due to a lower trade deficit at USD 34.6 billion, and a rise in net services receipts, the central bank said. The CAD is a critical indicator of the macroeconomic health and represents the gap between the overall foreign exchange expended and received in the economy. The data also comes on a day when the rupee depreciated to a 17-month low of 74.24 against the US dollar.

For the first nine months of the fiscal year, the CAD has narrowed to 1 per cent of the GDP..