The latest balance of payments data released by the Reserve Bank of India (RBI) last week indicate that the CAD in fiscal 2010-11 could be anywhere between 3.5 and 4.0 per cent of gross domestic product (GDP).
Could plumb to 57 against the US dollar if macro dynamics continue to weaken.
The Indian currency on Friday traded at 62.48, down 41 paise against the US dollar at 1645 hours.
The report noted that export volumes are likely to remain sluggish.
In a recent article, Rajan has ridiculed critics of the exchange rate policy.
Without naming India, S&P said it expects that in regions where inflation already exceeds targets, or which are vulnerable to capital flight, central banks will be forced to raise interest rates.
'The reform agenda is progressing in the right direction'.
The rupee was overvalued by 12.21 per cent as on April 18, 2007, according to the Reserve Bank of India. The rupee, which was Rs 41.98 per dollar on April 18, surged further to close at a nine-year high of 41.67/68 on Monday.
A strong currency helps in fighting some of the import-led inflation.
The recent weakness of the rupee has been due to yuan's devaluation.
India's flexible (flex) office segment, having breached pre-pandemic levels, is thriving as corporates, startups, multinational corporations, and global capability centres (GCCs) expand in India, seeking low-capital yet Grade A plug-and-play facilities. In the first quarter (Q1) of 2025, the flex office segment continued to grow, with flex space leasing rising by 22 per cent to 2.2 million square feet (msf), according to Colliers.
If the RBI governor's logic holds, the rupee is far from being extremely overvalued.
RBI may go for a 25-basis point cut at its February policy meet.
If Beijing succeeds in this multipronged effort to challenge the current dominant power, it will have not just economic but political and security consequences. There is no let-up in the South China Sea nor any de-escalation moves on the India-China border. This portends to ominous signalling from Beijing, observes China expert Srikanth Kondapalli.
'It is time to allow the rupee to move towards its true value, as it is hurting Indian exports, investment and SMEs associated with export sectors that create jobs,' argues Pravakar Sahoo.
The rupee has not depreciated enough against other currencies.
American President Donald Trump has announced imposing reciprocal tariffs on its major trading partners including China that levy higher import duties on goods shipped from the United States. He has already announced a 25 per cent duty on steel and aluminium imports, which will come into effect from March 12.
The rupee has had a volatile run in the past one week.
Rupee volatility could be dampened if it is steadily manoeuvered to levels consistent with inflation differentials, say Jaimini Bhagwati and Abheek Barua
The rupee is under pressure for the past one week.
Going by the real effective exchange rate, the rupee is overvalued
Indian economy is in a sweet spot, with a mix of solid growth and moderating inflation, Moody's Ratings said, forecasting a 7.2 per cent GDP growth in the 2024 calendar year and 6.6 per cent in the next. In its Global Macro Outlook 2025-26, the rating agency said the global economy has shown remarkable resilience in bouncing back from supply chain disruptions during the pandemic, an energy and food crisis after the Russia-Ukraine war began, high inflation and consequent monetary policy tightening.
The central government has given banks and credit card entities six to eight months to put in place the requisite reporting mechanism and related features to collect tax at source on international credit card transactions, a senior bureaucrat told Business Standard. According to the bureaucrat, the plan to bring overseas credit cards under the Liberalised Remittance Scheme (LRS) has not been mothballed and is simply being deferred so that banks get adequate time to get the system up and running. The official expects the reporting mechanism to be ready in the given time, and the rule could be implemented in the next financial year (2024-25, or FY25).
'India's sizeable foreign exchange reserves should serve as a buffer.'
Infrastructure and inflation targeting are expected to be top priorities for the new Reserve Bank of India governor, says A V Rajwade.
'Revision of the base year for both CPI and GDP are long overdue.' 'The basic data that went into the 2011-2012 series were mainly from surveys done in 2011 or earlier.' 'We have since seen the emergence of new sectors like platform-based work and online marketing.' 'The employment surveys and the consumption surveys need to reflect these adequately.'
Dollar sales by exporters and firm local equities also supported the local currency.
Will allowing business correspondents to hawk insurance products help in reviving 5-lakh strong field agents as a viable channel?
It is surprising that central bankers around the world have cautioned the US Federal Reserve against raising rates.
Launched in September 2013, the Conference Board Leading Economic Index for India, conceptualised back to April 1990, has successfully signalled turning points in the economic cycles of India.
The rupee has depreciated 2.35 per cent in the past three months and one per cent in the past month, despite strong capital flows and falling oil prices.
The Indian economy appears to have slowed down in 2018-19 due to lower private consumption, tepid growth in fixed investment and muted exports, a finance ministry report has said.
A gradual weakening of the rupee, however, may add to inflationary pressures.
While RBI's foreign exchange reserves have swelled to over $400 billion, it has a 'sell' position of $981 billion.
Possible slowdown of FII money into debt and equity markets could add pressure on currency.
'We are going to need more technical people in government.' 'You can't expect a generalist to understand the complicated world of financial engineering.' 'I regret to say that most of our politicians have no competence to deal with these things. Nor is there a willingness to learn.'
Is India really one of the cheapest nations to live in?
To the extent that monetary variables affect investment, the weather, thus, looks far less clement.
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