An Indian man displays new 2000 rupee notes outside the Reserve Bank of India (RBI) in Mumbai on November 10, 2016.
Long queues formed outside banks in India as they reopened for the first time since the government's shock decision to withdraw the two largest denomination notes from circulation. / AFP PHOTO / PUNIT PARANJPE
An Indian man displays new 2000 rupee notes outside the Reserve Bank of India (RBI) in Mumbai on November 10, 2016. Long queues formed outside banks in India as they reopened for the first time since the government's shock decision to withdraw the two largest denomination notes from circulation. / AFP PHOTO / PUNIT PARANJPE

India's current account deficit stood at $1.7 billion in Q3FY21 from a surplus of $15.1 billion reported for the second quarter of the current fiscal.

On a YoY basis, the country's Balance of Payment status was in a deficit of $2.6 billion during Q2FY20.

"Underlying the current account deficit in Q3:2020-21 was a rise in the merchandise trade deficit to US$34.5 billion from US$14.8 billion in the preceding quarter, and an increase in net investment income payments," the RBI said in a statement on India's Q3FY21 BoP.

According to the central bank, net services receipts increased, both sequentially and on a year-on-year basis, primarily on the back of higher net export earnings from computer services.

However, private transfer receipts, mainly representing remittances by Indians employed overseas, declined marginally on a y-o-y basis but improved sequentially by 1.5 per cent to $20.7 billion in Q3:2020-21.

"Net outgo on the primary income account, primarily reflecting payments of investment income, increased to US$ 10.1 billion from US$ 7.4 billion a year ago."

As per the RBI, in the financial account, net foreign direct investment (FDI) recorded a robust inflow of $17 billion as compared with $9.7 billion in Q3 of 2019-20.

"Net foreign portfolio investment (FPI) was US$21.2 billion as compared with US$7.8 billion in Q3:2019-20, primarily reflecting net purchases by foreign portfolio investors in the equity market."

"With repayments exceeding fresh disbursals, external commercial borrowings to India recorded net outflow of US$1.7 billion in Q3:2020-21 as against an inflow of US$3.2 billion a year ago."

Besides the data showed that net accretions to non-resident deposits increased to $3 billion from $0.8 billion during the corresponding period of 2019-20.

"There was an accretion of US$ 32.5 billion to the foreign exchange reserves (on a BoP basis) as compared with that of US$ 21.6 billion in Q3:2019-20."

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