CAD to be ~1.5% of GDP in FY16: RBI Dy chief

“This year, our current account deficit (CAD) would be in the region of 1.5% of GDP,” he said at an event in New Delhi organised by industry body FICCI.

RBI Deputy Governor Urjit Patel on Thursday said that the central bank expects India's current account deficit (CAD) around 1.5% of GDP in the current fiscal year.

“This year, our current account deficit (CAD) would be in the region of 1.5% of GDP,” he said at an event in New Delhi organised by industry body FICCI.

For the first quarter ended June, CAD narrowed to 1.2% of GDP at US$6.2bn.

On interest rates, Patel said that low inflation over medium-to-long term will help bring down the cost of capital.

Retail inflation slipped to a record low of 3.66% in August while WPI inflation fell to a historic low of (-) 4.95%.

Patel also said that fiscal deficits of both, the central and state governments also play an important role in the cost of capital as they are the largest borrowers.

The monetary policy review by the RBI is on 29th September.