MUMBAI: India’s current account deficit widened in the April-June quarter as imports rose and exports fell, data showed, spelling more bad news for the country’s ailing currency.

The deficit expanded to $21.8 billion, or 4.9 percent of gross domestic product, against $16.9 billion a year earlier, the Reserve Bank of India (RBI) said in a statement on its website.

“The trade deficit in the Q1 of 2013-14 increased due to a rise in imports and some decline in merchandise exports,” the RBI said.

India’s current account deficit, the broadest measure of trade, is so large that foreign capital is required to finance the gap, at a time when the country is facing economic growth at decade-lows.

Exacerbated by hefty imports of oil, coal and gold, the deficit has been one of the main factors leading to the depreciation of the rupee.

The currency hit a series of lifetime lows in July and August, before making a recovery in recent weeks.

The local currency plummeted as much as 20 percent to 68.85 to the dollar in late August.

The rupee gained on Tuesday, while the dollar fell broadly following the first US government shutdown in 17 years.

Analysts expect the current account deficit to fall in coming months owing to a rise in the import duty on gold imports and improved exports due to the stronger dollar.

Finance minister P. Chidambaram has promised that the country’s deficit for the year to March 2014 will be kept at $70 billion, against a level of $88 billion last year.

“The current account deficit numbers were lower than market expectations and have provided some support to the rupee. With state elections coming up and then national polls, I think the focus will shift toward how the reforms process plays out,” said Subramanian Sharma, director at Greenback Forex, told Reuters.

“The rupee may trade in a band for now before another bout of dollar buying emerges.”

The rupee closed at 62.46/47 per dollar compared with 62.60/61 on Monday after two sessions of losses.

Indian markets are closed on Wednesday for a national holiday.