Barclays Plc expects the gap in current account — the broadest measure of trade in goods and services — to be 1.8% of gross domestic product in the year starting April 1, after previously cutting it to 1.9% from 2.3% deficit it had estimated in mid-February. Citigroup Inc. slashed its forecast even further to 1.4% of GDP from 2.2%, reflecting a steady drop in goods imports and strength in services exports.

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The lower prints will provide a tailwind to the rupee, which is vulnerable to a selloff, given the twin deficits in the nation’s budget and current account make 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.

“We are encouraged by the fact that the narrowing of the trade deficit has sustained and services exports remain strong,” said Ashish Agrawal, head of foreign-exchange and emerging-market macro strategy research at Barclays in Singapore. “The lower current account deficit reduces dependence on financing flows and RBI’s dollar sales at the margin.”

That’s an added positive for the rupee, which along with Asian peers gained against the dollar after a dovish interest-rate hike by the Federal Reserve. The rupee was up 0.2% to 82.30 to a dollar on Monday.

Services Surprise

What seems to have caught economists by surprise is the strong services exports print.

Services trade surplus was strong at $14.6 billion in February, building on January’s revised surplus of $13.8 billion. Services exports nearly touched $30 billion in both January and February, an increase of about 40% on-year.

HSBC Holdings Plc attributes a part of this rise to Global Capability Centres set up by large multinational corporations. India is home to about 40% of global GCCs, and this ratio is only expanding as they rise in scope, an HSBC report said.

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“Services trade surplus is truly a hero in India’s foreign trade story right now,” said Dhiraj Nim, an economist and forex strategist at Australia and New Zealand Banking Group, who is confident the trend will continue.

Barclays expects the improving external sector fundamentals and relatively cheap valuations to help the rupee rally later as the dollar weakens. But most remain cautious amid global volatility and the Reserve Bank of India’s aim to build back reserves at every opportunity.

From the current account perspective, this augurs well for the rupee, said Madhavi Arora, lead economist at Emkay Global Financial Services Ltd. That said, the global situation is extremely fluid and could adversely impact global risk appetite for risk EM assets, including the rupee — emerging Asia’s worst performing currency last year and among the bottom this year.

“Thus the capital account side also needs a watch,” she said.

The prices of gold and silver in India on Monday experienced a slight decline in comparison to the previous day. According to data by Goodreturns, the rate for 22-carat gold per gram was Rs. 5,471, a decrease from Sunday’s Rs. 5,485. Similarly, the prices for 8 and 10 grams of 22-carat gold stood at Rs. 43,768 and Rs. 54,710, respectively, exhibiting a drop of Rs. 112 and Rs. 140.

The current meeting of the CBT, its 233rd, will be held under the leadership of Bhupender Yadav, the Union minister for labour and employment.

At present, EPFO has around 6 crore active members, of whom 72.73 lakh were pensioners in FY22, according to Moneycontrol.

Here are some issues that may be discussed during the meeting:

Interest rate: For FY23, the interest rate is likely to be around 8%. The existing rate is 8.1%, which was proposed in March last year for FY22, and approved by the Union finance ministry in June of that year.

The existing rate is the lowest offered by the body in 4 decades.

Higher pension: The board may hold detailed discussions regarding the higher pension option for subscribers after the Supreme Court order. Following the order, EPFO gave employees time till May 3, to opt for higher pension linked to their salaries.

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Minimum pension: The CBT may consider increasing the monthly pension from ₹1,000 to ₹3,000, which would be in-line with recommendations made by the parliamentary panel on labour.

Ceiling wage: It is likely to be raised from the current ₹15,000 per month to ₹20,000 per month. It was previously revised in 2014, when it was increased from ₹6,000 a month to ₹15,000 a month, for companies with at least 20 employees.

Besides these, board members may also discuss steps to improve EPFO’s coverage for its workers, along with increasing investment of incremental deposits in equity instruments, age or risk profile of subscribers notwithstanding.