People like Ken Rogoff talked about global imbalances in the current account deficit not being sustainable.
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But now the current account deficit is no longer covered by foreign direct investment.
Beyond mid-year, we expect a steady decline of the trade balance to reduce the current account.
He said capital inflows would be "more or less" adequate to cover the current account gap.
The currency, informally known as the yuan, has been convertible on the current account since December 1996.
Thus the current account gives information about people's decisions as to what kind of assets to hold.
But the government will have to reduce the current account deficit and be wary of economic overheating.
Stateside, the trade imbalance between the values of what America imports and exports is known as the current account deficit.
Rate cuts could potentially widen the current account deficit by encouraging consumption and boosting demand for imported goods.
While the current account may be technically balanced by investment for accounting purposes.
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Both the current account and the exchange rate (painfully strong for much of 1997) have been under pressure since September.
Some analysts predict that the current account could swing into deficit next year if the global outlook gets much worse.
The prime exception is China, where hot money continues to pour in and where the current account has a massive surplus.
I've mentioned it often enough in the past, along with the likely rise in the current account deficit last year.
Instead, the yen's strength is a by-product of private sector recycling of the current account surplus and international purchases of Japanese assets.
Usually, though, trade is responsible for most of the current account imbalance.
The current account deficits are up more than fourfold since 1989, a year of peak popular angst about the hollowing out of America.
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The current account deficit runs 3 to 5 percent of GDP (up from less than 0.5 percent at its weakest in the early 1970s).
It does not help in understanding the dynamics of the current account over time, especially in countries that run persistent current-account deficits or surpluses.
Thanks to the dollar's stability, liquidity and low transaction costs, the U.S. has an edge in attracting capital inflows to finance the current account deficit.
The current account is moving towards balance and exports are up.
"The current account deficit remains the biggest risk to the economy, " and could warrant a swift reversal of its policy stance, the RBI said on Friday.
The current account deficit will likely narrow to 4.7% of gross domestic product in the current fiscal year from an estimated 5.1% last year, he said.
The necessary counterpart to an inflow of foreign capital is a deficit in the current account the largest component of which is trade in goods and services.
The current account deficit basically reflects capital imports and exports, or, to put it a slightly different way, the difference between domestic savings and domestic investment.
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Analysts give diverse reasons for the meltdown, most pointing to the current account deficit fueled by numerous infrastructure mega-projects that rely on external financing in U.S. dollars.
That is nonsense, as can be seen by looking at the current account from the other end: as the difference between a country's saving and its investment.
The country's huge demand for gold is one of the primary reasons for its large import bill, which has led to a widening of the current account deficit.
According to Ms. Sahay, the current account gap was likely more than 6% in the October-December quarter, but it would narrow to below 5.5% during the January-March period.
Mr. Rangarajan expects the current account deficit in this fiscal year, which ends March 31, to be at a record high of around 5% of gross domestic product.
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