Balance of payments narrows but remains in surplus for fourth year in a row

MUMBAI: The country's balance of payments ( BoP) remained surplus for the fourth consecutive year at $ 6.9 billion for the second quarter, narrower than $ 11.2 billion surplus in the first quarter, the Reserve Bank of India said here today.

The trade deficit in the September quarter rose to $ 38.6 billion from $ 34.6 billion a quarter ago, according to RBI data.

On a balance of payments basis (excluding valuation effects), the foreign exchange reserves rose by $ 18.1 billion during the September quarter as against a decline of $ 10.7 billion a year ago.

While, forex reserves in nominal terms, including the valuation effects, rose by $ 9.6 billion during the reporting quarter as against a decline of $ 14.8 billion during the same period last year, as per RBI data.

BoP is the record of all economic transactions between residents -- individuals, firms and government bodies -- of a country and the rest of the world in a particular period and therefore includes all external visible and non-visible transactions of a country during a given period.

On a BoP basis, merchandise export growth decelerated to 4.9 per cent in Q2 from 11.9 per cent in Q2 of last fiscal, while on a BoP basis, merchandise imports increased by 8.1 per cent in Q2 as against a decline of 4.8 per cent in Q2 of FY14, largely due to a sharp rise in gold imports.