Favorable trade trends are improving India current-account deficit and benefiting the rupee, one of the worst performers in emerging Asia. According to Barclays, the current account gap is forecast at 1.8% of GDP in FY23, while Citigroup slashed its forecast even further to 1.4% of GDP, reflecting a drop in goods imports and strength in services exports. These lowered forecasts will provide support for the rupee, which is vulnerable to a selloff due to the twin deficits in the nation’s budget and current account, making it more reliant on foreign inflows. A narrowing shortfall will also take the pressure off the central bank to sell foreign exchange from its reserves to stabilize the currency and check imported inflation.