Markets overreacting to CAD figures, says Chidambaram
27 Jun 2013
Finance minister P Chidambaram, no doubt buoyed by figures that show India's current account deficit (CAD) narrowed in the last quarter of 2012-13 compared to the same period in the previous fiscal year, today said Indian markets are being too pessimistic about the trade deficit.
Concerns about the current account deficit have been a key factor behind the rupee's slump to a record low of Rs60.76 to the dollar on Wednesday before recovering by a few paise today.
"We do certainly believe the market is over reacting. And this is evident from the fact that it over reacted by anticipating a much higher CAD for the entire last year," Chidambaram's finance ministry said in an official statement.
The statement seemed to gloss over the fact that India's CAD for the full 2012-13 fiscal stood at a record high 4.8 per cent of GDP.
