In the recent period, India’s external sector has become resilient with the current account deficit being maintained at modest levels after a few years of marginal surplus during 2001-02 to 2003-04. External sector indicators show considerable level of sustainability attained in the last decade.
Since 2005, the rand has traded in a fairly stable range. However, as you are aware, the rand is seen as both a commodity and emerging-market currency. As a result, the volatility of the currency has recently increased due to developments in commodity prices and changes in investors’ risk appetite for emerging-market currencies.