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.
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.
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.
'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.
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
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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).
The rupee is under pressure for the past one week.
Going by the real effective exchange rate, the rupee is overvalued
'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.'
'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.'
'India's sizeable foreign exchange reserves should serve as a buffer.'
Donald Trump's exaggerated opinion of his dealmaking capacity can get him into trouble, observes R Sriram.
Infrastructure and inflation targeting are expected to be top priorities for the new Reserve Bank of India governor, says A V Rajwade.
Dollar sales by exporters and firm local equities also supported the local currency.
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.
What makes Pushpa 2 float is Allu Arjun's magnetic performance. The actor really goes an extra mile to deliver the wildfire he promised, observes Mayur Sanap.
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.
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.
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.
The currency market won't care for our moans, groans, cries and sighs. The rupee will find its own level, explains Tamal Bandyopadhyay.
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.
The rupee appreciation will most likely lead to lower inflation and less ambiguity.
The rupee's recent decline is sharp, yes, he says, but the tale would be scary if India was like the Asian crisis countries of 1997-98, or even Argentina in 2001, when large amounts of debt was denominated in foreign currency. According to him, India's percentage of external debt to GDP was around 20
Many macroeconomic forecasters have built predictive models on inflation, all of which highlight intense downward pressure on prices.
It would be a miracle indeed if we grow at 7/8 per cent a year over the current and next few years, says A V Rajwade
The new foreign trade policy is considered to be less effective.
The revival of long-term growth is highly dependent on the revival of private investment.
It is high time to manoeuvre the rupee more effectively and predictably, even as it has to be recognised that such tweaking of the rupee needs to be accompanied by reforms to the real sector and factor markets.
The RBI governor is focused on growth, and keeping rupee slightly depreciated is part of that 'Atmanirbhar Bharat' strategy.
So far, India has attracted over $20 billion in the debt segment, thanks to the rate differential.
The official data on April-June GDP will be released on August 31.
Following are the highlights of the Economic Survey 2022-23 tabled in Parliament on Tuesday
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