Current account balance recorded a surplus of $19.8 billion (3.9 per cent of GDP) in Q1 of FY21 on top of a surplus of $0.6 billion (0.1 per cent of GDP) in the preceding quarter.
The surplus was on account of a sharp contraction in the trade deficit to $10 billion due to steeper decline in merchandise imports relative to exports on a year-on-year basis.
Capital flows reduced to almost negligible to 0.1 per cent of GDP in Q1FY21 from 2.4 per cent of GDP in Q4FY20.
In the financial account, net foreign direct investment recorded outflow of $0.4 billion as against inflows of $14.0 billion in Q1 of FY20.
The country added $19.8 billion to its foreign exchange reserves 1QFY21 compared with $14 billion in Q1FY20.
Net inflow on account of non-resident deposits increased to $3 billion from $2.8 billion in Q1FY20.