CAD will be sustainable, can be financed by normal capital inflows: RBI Guv

of India Governor said on Thursday that the country’s (CAD) would be sustainable and could be financed by normal capital inflows.

India’s CAD widened to $23 billion in the third quarter ended December 2021 (Q3FY22), which was 2.7 per cent of the country’s Gross Domestic Product (GDP) due to higher trade deficit.

The CAD was $9.9 billion (1.3 per cent of GDP) in the second quarter ended September 2021(Q2FY22) and $2.2 billion (0.3 per cent of GDP) a year ago (Q3FY21).

With global crude oil prices surging above $100/bbl – first time after 2014 – there are concerns that the CAD could widen beyond sustainable levels.

Speaking at an event organised by CBIC, Das reiterated the central bank’s views on cryptocurrency saying that there are risks to financial stability.

“As far as the government is concerned, I can’t reply. The government has announced it will come out with a discussion paper. RBI has conveyed its views to the government. RBI is very clear there are huge risks to financial stability,” he said while answering a question on what is the RBI vision for use of crypto in government for paying taxes as well as procurement by the government.

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