India’s current account deficit, a key area of concern, narrowed sharply in the second quarter after a series of measures helped curb gold imports.
The deficit fell to $5.2bn during the July-to-September quarter, down from $21bn during the same period last year.
A current account deficit is the difference between inflow and outflow of foreign currency and occurs when imports are greater than exports.
India’s deficit had been widening raising fears over its economic health.
India’s Finance Minister, P Chidambaram, said the latest numbers indicated that the country was “on target to contain the current account deficit”.
According to India’s central bank, the Reserve Bank of India (RBI), the current account deficit stood at 1.2% of the gross domestic product (GDP) during the quarter, down from 5% of GDP during the same period last year.
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