Kolkata: India's current account slipped into deficit in May from a surplus in April while the capital account deficit narrowed, monthly balance of payments data released by the Reserve Bank of India showed.Overall, the balance of payment remained in a $4.4 billion deficit in May, as compared with a $6.6 billion deficit in the first month of the fiscal, amid West Asia conflicts which disrupted global crude oil supply fuelling risk of second order inflation.The country's current account was in a $2 billion deficit in May as compared to a $4.7 billion surplus in the previous month, as merchandise deficit at $27.9 billion offset the remittances flow and surplus in the services sector.The services sector was in a $15.7 billion surplus while the net transfers, which includes remittances, foreign aids, pension and gifts, were at $13.6 billion, data showed.On the capital account front, the deficit narrowed to $2.4 billion in May from a $11.3 billion deficit in April as foreign portfolio investors slowed the pace of offloading their investments from the local markets.The foreign portfolio investors took out a net $4.7 billion in May as compared to a $8.7 billion net outflow in April driven by the risk-off sentiment amid geopolitical uncertainties.There was also a net foreign direct investment outflow of $0.1 billion in May against an $7.4 billion net inflows in April, the central bank data showed.
India's current account slips into $2 billion deficit in May as trade gap widens
India's financial landscape shifted in May, marked by a current account deficit alongside a narrower capital account deficit. The total balance of payments registered a $4.4 billion deficit, mainly due to a substantial merchandise deficit of $27.9 billion, overshadowing service surpluses and remittances. Furthermore, foreign portfolio investors began to temper their divestments in the local markets, with the central bank noting an outflow in foreign direct investment.
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