Profit repatriation, ECB interest hit 2% of GDP
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Based on the way the outflow position looks, and the latest current account deficit of 5.4% for Q2 FY13, JP Morgan estimates the full-year CAD at 4.2% of GDP, up from the 3.8% forecast earlier.
Despite the sharp surge in forex flows, the widening CAD has meant the rupee has actually depreciated from its levels at the beginning of the quarter. In short, even a small dip in inflows can cause sharp volatility in the rupee.