Indian government has forecasted a lower current account deficit for this year in comparison to the year 2011-12. Forecast of the current account deficit is 3.6 % of the GDP in 2012/13 compared to 4.2 per cent in the previous year. The euro hit a six-week high against the Japanese yen on Friday when German Chancellor Angela Merkel voiced support for European Central Bank (ECB) President Mario Draghi’s, crisis-fighting strategy. Now investors’ hope that the policy holders will work together to took out the euro zone from the debt crisis.
This news has given a positive sentiment in the investors and value of rupee is expected to increase in the near future.WPI inflation of the country for the month of July is also lower in comparison to June. So, the manufacturing sector is expected a cut in the interest rate in September review of policy by RBI.
Now it is expected that the rupee is at its lowest value and it will take a spike in near future due to forecasted lower account deficit, controlled inflation and good European condition.
For a year country has suffered from the higher inflation and current account deficit but RBI, the central bank of India has taken strong steps to tackle it and it also gets success in controlling the inflation up to a limit.
Up to now government has applied no reform policy for the growth of the country. So, government should take the required steps as soon as possible so that development and supply sector of the country should not disturb.