The Government will soon announce import curbs on several non-essential items, a top Finance Ministry Official said recently while terming “the 10 per cent depreciation” in the rupee in the last few weeks as a “temporary phenomenon”. “There are always implications of the dollar and rupee exchange rates … this 10 per cent depreciation in last few weeks that is a temporary phenomenon,” he said at an event organised by PHD Chamber of Commerce. Finance Minister Arun Jaitley announced the Government’s decision to relax norms for raising overseas borrowing and impose restrictions on the non-essential imports as part of efforts to check rising current account deficit (CAD) and a falling rupee. India’s current account deficit deteriorated to 1.9 per cent of GDP in 2017-18 from 0.6 per cent in the previous year and is forecast to rise to around 2.8 per cent in the current year.
The trade deficit expanded to USD 80.4 billion in the first five months of the current fiscal year from USD 67.3 billion in the year-earlier period. The rupee has logged year-to-date losses of more than 13 per cent against the strengthening US dollar after trade concerns and firming up crude oil prices. It has dropped close to 6 per cent since August.