Kolkata: Governor of Reserve Bank of India, Raghuram Rajan said the RBI was comfortable with the current account deficit (CAD) even after it widened in the July-September quarter. Rajan while speaking at a news conference after the central bank’s board meeting in Kolkata city, said risks remain to the current account deficit even though he was not apprehensive about it. Rajan said that gold imports had increased in the country which may have resulted in the increase in the CAD.
Global oil prices have fallen to a five-year low on Wednesday. Brent crude oil fell to $63.56 a barrel, the lowest since July 2009, on signs of oversupply and waning demand. India’s largest imports are crude oil and gold. Turning to the economy, Rajan said an interest rate cut won’t by itself lead to higher economic growth, although he noted it would have an impact. Turning to limits on foreign investments in government bonds, Rajan said it would look at raising the limit at an appropriate time, and would look at expanding it steadily.
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