Pain for rupee likely as India's trade gap, capital outflows balloon

A shortfall in India's current account -- the broadest measure of trade -- will probably widen to 2.9% of gross domestic product in the fiscal year ending March 31

India’s ballooning trade gap and capital outflows are raising new risks for the rupee, just as the currency’s plunge to a record low adds to inflation woes. 

“India’s external balances are deteriorating,” economists at Goldman Sachs Group Inc. wrote in a note Thursday, citing the terms-of-trade shock from higher commodities prices and weakening global growth. “Going forward, the trajectory of the rupee is likely to be pushed weaker versus the dollar on account of the deteriorating external balances.” The Indian rupee declined to a new all-time low of 79.1113 per dollar on Friday. 

While the Reserve Bank of India