BoP comfortable despite high crude price and IMDs redemption: RBI

Mumbai, Aug 30 (UNI) The Balance of Payments(BoP) position remained comfortable during 2005-06 despite pressures imposed by higher international crude oil prices and redemption of India Millenium Deposits (IMDs), a RBI release on BoP informed today.

The release further added, the Current Account Deficit (CAC) benefited from the sustained growth in exports of services such as software and other business services and remittances, the CAC remained at modest 1.3 per cent of GDP during 2005-06, as the surplus under invisibles continued to remain buoyant, the release added.

However, capital flows remained significant during 2005-06, exceeding the current account deficit. Foreign investment flows, both direct and portfolio, increased reflecting mainly the foreign appetite for domestic financial assets on the back of strong fundamentals and robust corporate performance. The balance of payments recorded a surplus and the foreign exchange reserves increased by US dollar 10.1 billion during the year. External debt, as a proportion of GDP, continued its declining trajectory, the release concluded.

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