Whereas it is understood that a more open economy that has access to international capital flows can run a higher current account deficit than a less open one, our approach to this issue will remain informed by appropriate caution in the interest of financial stability.
The acceleration in overall growth and the reemergence of current account deficit since 2004-05 has been accompanied by a greater degree of openness. The growth in current payments has been accompanied by healthy growth in current receipts - in both goods and services, thus providing for some confidence in the sustainability of current trade patterns and financial stability.