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India's quarterly current account gap widens

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Indian people speak on their mobiles outside the Reserve Bank of India (RBI) headquarters in Mumbai on July 30, 2013 (AFP/File)

India's current account deficit widened in the April-June quarter as imports rose and exports fell, data showed Monday, spelling more bad news for the country's ailing currency.

The deficit expanded to $21.8 billion, or 4.9 percent of gross domestic product, against $16.9 billion a year earlier, the Reserve Bank of India (RBI) said in a statement on its website.

"The trade deficit in the Q1 of 2013-14 increased due to a rise in imports and some decline in merchandise exports," the RBI said.

India's current account deficit, the broadest measure of trade, is so large that foreign capital is required to finance the gap, at a time when the country is facing economic growth at decade-lows.

Exacerbated by hefty imports of oil, coal and gold, the deficit has been one of the main factors leading to the depreciation of the rupee.

The currency hit a series of lifetime lows in July and August, before making a recovery in recent weeks.

The rupee ended trade Monday at 62.60 to the dollar, a 14 percent drop from the start of 2013.

Analysts expect the current account deficit to fall in coming months owing to a rise in the import duty on gold imports and improved exports due to the stronger dollar.

Finance minister P. Chidambaram has promised that the country's deficit for the year to March 2014 will be kept at $70 billion, against a level of $88 billion last year.