As per a Karvy report, as private investments in a general case slow down in an election year, there is threat to the recovery in current and fiscal account deficits. It is estimated that rupee may depreciate to 78 per US dollar level in the current year and rise up to 69.50 level.
The current account deficit during first half of the fiscal year 2018-19 stands at $34.94 billion, while the same for previous fiscal year 2017-18 came in at $48.72 billion. In the first half of FY 19, the balance of payments has been identified at $13.20 billion.
Further in accordance with the report, as there looms uncertainty in respect of assembly election outcome due in May this year, both foreign direct investors (FDIs) as well as foreign institutional investor (FIIs) will likely avoid the Indian markets.