September’s current account deficit surprised the market to the upside at $3.28bn; the 12-month rolling current account deficit is likely to continue to widen. With this outcome, the gap in the first nine months of the year becomes $49bn, which compares unfavorably with the deficit seen in the same period of 2012 ($38bn). Market consensus error was due to higher than expected gold imports.

There are some developments are worth noting on the capital account front. FDI inflows are still weak while portfolio inflows are losing momentum.

Stable oil prices and the recent momentum in GDP growth may negatively effect the gap, cause it to widen, and become more worrisome for the outlook of the economy, following the re-balancing of last year. On the other hand, recent developments on the inflation front suggest a permanent deterioration in prices stability. A rise in money markets rates is very likely in the case of capital inflows.

To sum up with, this thing looks ugly.