India's current account deficit narrows to $5.2 billion in August as capital account surplus hits $50.6 billion

India's current account deficit narrowed to $5.2 billion in August, down from $6.1 billion a year prior, according to data released by the Reserve Bank of India. The country also recorded a capital account surplus of $50.6 billion, up from $0.5 billion in the same period last year. As a result, the overall balance of payments for August stood at a surplus of $45.4 billion, compared to a deficit of $5.6 billion in the corresponding month a year ago.

The central bank's dollar mobilization program contributed to an accumulation of non-resident deposits worth $83 billion in August, aiding the country's impressive capital account surplus. However, a $22.4 billion net outflow under external commercial borrowings offset some of this gain.

Meanwhile, the current account deficit shrank due to a narrowing merchandise deficit and a widening services surplus, as per RBI data. The balance of payments surplus for the first five months of the financial year stood at $58 billion, compared to a $0.8 billion deficit a year earlier. However, the current account deficit widened for the five-month period to $18.3 billion, up from $12.8 billion a year ago. The capital account surplus was $76.3 billion, compared to $12 billion in the previous year.