External Trade - Trade deficit normalises :Edelweiss

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Trade deficit narrowed to ~USD13.6bn in November from record high of ~USD19.6bn in October as both exports and non-oil imports normalised from exaggrated levels in the previous month. Broadly, exports have been moderating owing to weakness in external demand and discontinuation of DEPB benefits, although high base is exaggerating the slowdown. Imports, meanwhile, are still buoyant owing to high crude oil and gold imports. Going ahead, substantial depreciation of INR (~12% during April-November on REER basis) will definitely bring favourable adjustments on trade account over the medium term, although in the near term, deficit is expected to remain around the current level.