Rupee won't go into free-fall even if CAD widens to 3-3.5%: BoA's Mehta

RBI needs to be fourth buyer in the bond market, says senior executive

India has enough foreign exchange reserves to ensure that the rupee holds its ground even if the current account deficit were to triple this financial year, said Jayesh Mehta, Bank of America’s India country treasurer, in an interview.

India reported a current account deficit of 1.2 per cent of the gross domestic product in 2021-22 (April-March). The widening import bill has caused the rupee to test new lows against the US dollar.

“We believe, the forex reserves being where they are, even if we were to have a current account deficit, which is around 3-3.5 per cent, we will be