Implications of an increase in current account deficit are yet to be fully understood. I recall an article that I read in Economic Times sometime in December 2005. I personally feel that the deficit is not a concern now, but this needs to be linked to the oil prices and FII inflows. Would be keeping a close watch on this over the next a couple of quarters.
For more on this read “RBI Quarterly Review No Sparks expected” published in Business Line on Jan.10, 2006.