We would usually say a country with a 4% of GDP current account deficit and a fairly moribund domestic economy was a country in need of a hefty fall in its currency.
"The result of the high current-account deficit has been the depreciation of the rupee, " he said.
The necessary counterpart to an inflow of foreign capital is a deficit in the current account the largest component of which is trade in goods and services.
There is a need for Brazil to attract money because of its current account deficit so there will still be dollars flowing into Brazil and that will keep the channels of communcation open between the onshore and offshore markets.
As of 1989, the last full year before she was ousted by her own party in May of 1990, the current account DEFICIT had reached an appalling 3.9 percent of GDP.
FORBES: Thatcher's Last Wish: Another Clunker From The Iron Lady
The average current account deficit of the four periphery economies now under pressure was 7% of national income in 2010.
Every extra dollar of current account deficit incurred by the United States is another dollar that has to be funded by foreigners.
Even more worrying, in the short term, is that alarming statistic I flagged up last week: the Office for Budget Responsibility expects us to run a current account deficit of 4% of GDP in 2012.
You might be shocked to hear that the OBR expects Britain to run a current account deficit of 4% of GDP in 2012 - that's the worst figure this century and 60% higher than in 2010.
As such, recent trends in trade flows and the balance of payments suggest that the current account deficit for this fiscal year will likely reach a record of about 5% of GDP before narrowing closer to 4% next year.
An IMF study in 2009, by Marco Terrones and Thomas Helbling, concluded that the biggest cause of the switch from a global current-account deficit to a surplus was mismeasurement of services.
That is why the country is likely to have a current-account deficit of 5.5% or so of GDP this year.
In Poland, for example, credit to the private sector grew by an extraordinary 36.6% in 2008, contributing to a current-account deficit of almost 9% of GDP.
The country's huge demand for gold is one of the primary reasons for its large import bill, which has led to a widening of the current account deficit.
The current-account deficit, now around 5% of GDP, is a key factor: if capital flows into America slowed even more sharply, or dried up, the adjustment involved in reducing the current-account deficit could be painful both for America and the rest of the world.
Sharmila Whelan, an economist at CLSA, a brokerage firm, forecasts that India's current-account deficit will rise to almost 4% of GDP in the current fiscal year, and to 5.5% next year.
Thankfully, Britain's borrowing from the rest of the world did not come close - Spain's current account deficit in 2007 was more than 5% of GDP, twice as large as Britain's.
Partly because of privatisation, foreign direct investment should finance perhaps 60% of the current-account deficit.
Whichever numbers you choose, central banks' increases in dollar reserves have been large compared with overall foreign purchases of American bonds, and huge compared with the size of the current-account deficit.
The Indian government wants to curb imports of gold to try to help reduce the country's current account deficit, which hit a record 5.4% of total economic output between July and September last year.
The RBI said that India's gaping current-account deficit which analysts expect to exceed 6% of GDP in the current fiscal year through March was another obstacle to cutting rates.
But the government will have to reduce the current account deficit and be wary of economic overheating.
In May and June Turkey was hit particularly hard because of its high current-account deficit and expensive currency.
And, unlike America, they are not running a current account deficit with the rest of the world: they are paying their way in the global economy.
And it will destroy living standards in a country that has no means of financing a current-account deficit and so must eliminate it by shrinking domestic purchasing power.
Russia faces its first-ever current-account deficit, and much of its industry is in terrible shape.
Together with Japan's central bank, the People's Bank of China financed half of America's current-account deficit last year.
Indeed, like Argentina, Italy faces a growing competitiveness loss given an increasingly overvalued currency and the risk of falling exports and growing current account deficit.
Mr Taylor reckons the policy of accumulating reserves accounts for a significant and growing fraction of global surpluses enough (in the early years of this decade) to finance as much as a third of America's current-account deficit.
应用推荐