India grew 7.8% in Q1, but a $4.2-billion current-account deficit and $3.9-billion capital outflow pushed the balance of payments into deficit
Higher energy prices and weak capital flows could widen external pressures. Sustained BoP deficits can weigh on the rupee and overall macroeconomic stability
RBI swap schemes drew more than $127 billion from banks. The resulting inflows are expected to produce a strong BoP surplus in Q2
Temporary inflows cannot replace durable foreign investment. FPI outflows remain heavy, while net FDI of $6.1 billion needs to rise substantially
Surplus liquidity has crossed ₹6.6 trillion, pushing money-market rates below the repo rate even as inflation is expected to rise
Strong growth is encouraging, but India must attract stable capital and manage excess liquidity to safeguard both external stability and inflation control