Worrisome trade data

Overvalued Indian rupee needs attention

The data released last Friday revealed that India’s current account deficit in the first quarter of 2017-18 is at its highest level in four years, at 2.4 per cent of gross domestic product (GDP), or $14.3 billion. This was driven by rising imports of gold, which were 69 per cent higher year-on-year. Imports overall rose by over 20 per cent year-on-year in August, while exports rose by only 10 per cent. Thus, the trade deficit in the month increased to $11.64 billion; it was $7.7 billion in the same month last year. Fortunately, there is no immediate threat of a