Gold as a convenient villain

It is now official—the widening current account deficit (CAD) is a major source of concern for policymakers. In his budget speech, finance minister P. Chidambaram flagged CAD as his “greater worry”. Last month, the Reserve Bank India (RBI) governor warned this deficit could reach record levels. Figures available for the first half of the current fiscal year show that CAD indeed increased rapidly. As against 4.2% of gross domestic product (GDP) recorded at the end of the last fiscal, in the second quarter of this year CAD reached 5.4%.

Read Full Story>>