India’s trade deficit narrowed to a 10-month low in December despite a contraction in exports as a slump in crude oil prices and lower gold purchases caused imports to drop at a faster pace. Non-oil and non-gold imports rose at a healthy pace, suggesting strength in the domestic economy. The lower trade deficit will provide support to Indian rupee amid volatile global financial
markets because of crashing commodity prices, competitive currency moves and global growth concerns. Exports contracted by 3.77% in December after 7.2% growth last month mainly due to lower valuation of petroleum exports and a fall in the value of gems and jewelry sold overseas, data released by the government showed on Thursday. Imports declined by 4.78% during the month on a YoY basis.
Fitch Ratings says RBI rate cut doesn’t change India’s sovereign credit profile
The Reserve Bank of India’s unexpected 25 basis points rate cut does not change the country’s sovereign credit profile, an analyst at Fitch Ratings told Reuters on Thursday. Instead, Thomas Rookmaaker, a director at Fitch in Hong Kong, said government fiscal consolidation and the creation of a “credible low inflation environment” were more important factors.