India trade deficit for October 2020 - Angel Broking

Mr. Jyoti Roy - DVP - Equity Strategist, Angel Broking Ltd

India's merchandise trade deficit for the month of October 2020 stood at USD 8.71bn as compared to USD 11.75bn in October 2019. Exports for October 2020 were down by 5.1% YoY to USD 24.89bn, while imports were down by 11.53% YoY to USD 33.61bn. The trade deficit has widened from September's USD 2.7bn sequential decline in exports. Oil imports were down by 38.5% YoY to USD 5.8bn while non oil imports were down by 2.24% YoY to USD 27.62bn. The economic slowdown and sharp fall in fuel prices due to Covid-19 has led to compression of India merchandise trade deficit which coupled with strong FPI flows have led to a strengthening bias on the rupee. In order to counter an appreciating rupee the RBI has been intervening in the forex market which is reflected in India's foreign exchange reserves which has hit all time highs of USD 568.5bn as on the 6th of November. Going forward we expect overall BoP to remain in the surplus. In order to counter the appreciating bias we expect continued intervention by the RBI in the forex market as the Government and the RBI would not want the rupee to appreciate significantly from current levels.

Source : Equity Bulls

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