Mumbai: The Reserve Bank today said it is not the right time to take back measures it adopted to control rising current account deficit, but favoured removing curbs on gold imports.
“At this point, it will be premature to withdraw these restrictions for a variety of reasons,” RBI Governor Raghuram Rajan told analysts on a conference call after announcing the mid quarter review of the monetary policy wherein he left all key rates unchanged.
The RBI measures, the prime driver to narrow the current account deficit (CAD) to 1.8 per cent in the second quarter, will be withdrawn once the the deficit stabilises on its own, beyond the imposed gold restrictions, he said.
“Once we feel more comfortable with the current account deficit, once we have a sense that tapering, at least the threat of it, is behind us, we will certainly consider unwinding these distortionary actions,” Rajan said.
“I would be much happier if we had the kind of CAD we have without significant curbs on anything, including gold. We should aim to have a CAD without any distortions, removing the incentives for smuggling, that is what we will be working for,” he said earlier in the day.
CAD, which is the difference between the inflow and outflow of foreign currency, came down to 1.2 per cent in the September quarter, from 4.9 per cent in April-June period.
