The use of RBI capital to strengthen public sector banks will have many positive implications for the economy -- and a few manageable downsides, points out R Jagannathan.
The government on Monday ruled out making public the RBI report detailing the reasons why the central bank could not keep inflation within the targeted 6 per cent upper limit for the three consecutive quarters. "Yes sir, RBI has furnished a report to the central government, as mandated under Section 45ZN of the RBI Act, 1934 and Regulation 7 of RBI Monetary Policy Committee and Monetary Policy process Regulations, 2016," minister of state for finance Pankaj Chaudhary said in a written reply. The said provisions of the RBI Act, 1934, and regulations therein does not provide for making the report public, he said.
Theoretically, the currency with the public should expand in sync with the nominal income, which again moves in relation to the nominal growth rate of the economy. But the correlation breaks easily when other factors come into play, says Anup Roy.
'India's fundamentals are a lot better (than those of other emerging market economies).' 'India will suffer (witness a fall in its stock market) what I call the second order effect.' 'And the second order will happen when these funds (belonging to macro and hedge fund investors and which have leveraged Japanese yen-carry trades), because they lose money elsewhere as lot of their positions were financed by borrowing Japanese yen, will have to book profits in investment destinations where they are making money, including in markets like India.' 'They (these investors) will have to effectively sell in countries like India and which is the consequence (the crash in equity markets) that Indian markets might see.'
The balance sheet of the Reserve Bank plays a critical role in the functioning of the country's economy.
Rs 1,000 now buys $13.5 against $14 a year ago.
Chief Economic Advisor (CEA) V Anantha Nageswaran on Tuesday said India is not defending the rupee and the Reserve Bank of India is taking necessary steps to ensure that the movement of the rupee is gradual and in line with market trends. Nageswaran further said that the rupee is being managed in a manner that reflects the fundamentals of the economy. "India is not defending the rupee... I don't think Indian fundamentals are such that we need to defend the rupee. "The rupee can take care of itself," he said at an event in New Delhi.
What the reserves offer for now is improved import coverage of about 13 months, almost double the 2013 level of less than seven months. And, ammunition to arrest a rapid rupee slide, says Anup Roy.
Do not underestimate the ingenuity of the Deep State in America to have its way. Keeping the guard down will be a catastrophic mistake on the part of the Delhi establishment. We could get hit when least expected. That's what happened in Bangladesh and Syria, warns Ambassador M K Bhadrakumar.
'The biggest risk to the Indian markets from a 12-18-month view is that the current government does not get re-elected, or loses in a way that is not represented at all in the next central government.'
"The DMK is not worried a wee bit," he said on the ED searches. Such an action by the ED was 'usual, ordinary and a drama' enacted to divert attention.
'With tuition fees for international students rising, education loans have become critical for bridging the gap between savings, scholarship, and full cost.'
Penalties for non-disclosure or inaccurate disclosure of these details can be severe.
HCL Technologies has to fine-tune strategies to improve performance in the March quarter.
Reserve Bank Governor Shaktikanta Das on Monday said with the country's foreign exchange reserves at $677 billion, it is comfortably placed to deal with any spillover effects and for financing of the current account deficit. Over the last three years, the country's foreign exchange reserves have surged by $270 billion. He said as per the latest data, the foreign exchange reserves are $622 billion.
Having exposure to international funds and gold is a must for those who have foreign currency-denominated goals.
Some leading Indian companies are likely to see their earnings declining if the Indian currency depreciates further, analysts and finance heads say.
The fair market value of an immovable property will be higher from the acquisition cost.
Lord Jo Johnson, younger brother of former British prime minister Boris Johnson, has resigned his non-executive directorship of a UK-based investment firm linked with the now-withdrawn Adani Enterprises Follow-on Public Offer (FPO). 'The Financial Times' newspaper referenced UK Companies House records to reveal that 51-year-old Lord Johnson had been appointed as a director of London-based Elara Capital Plc in June last year and resigned on Wednesday, the day when the Adani Group announced withdrawal of the FPO. Elara, which described itself as a capital markets business raising funds for Indian corporates, was among the bookrunners on the FPO.
The RBI needs to maintain a healthy contingency reserve so that it can lend its support in case of a bank failure.
Hinting at further relaxation in the capital account convertibility norms, RBI Deputy Governor T Rabi Sankar on Thursday said the country is on the cusp of some fundamental shifts with regard to currency management. India has come a long way in achieving increasing levels of convertibility on the capital account and has broadly achieved the desired outcome for the policy choices in terms of achieving a stable composition of foreign capital inflow, Sankar said while addressing the Foreign Exchange Dealers' Association of India's (FEDAI) annual day meeting. Convertibility refers to the ability to convert domestic currency into foreign currencies and vice versa to make payments for balance of payments transactions.
Despite the narrowing spread of yields between the benchmark 10-year Indian government bond and the 10-year US Treasury bond, foreign portfolio investors (FPIs) are continuing to invest in the domestic debt market this year -- a trend backed by a stable currency and a less volatile bond market. FPIs have been net buyers in the debt market in 2023 so far, marking the first time since 2019. The yield spread between the 10-year Indian government bond and the 10-year US Treasury note stood at 3.14 per cent on August 8 - the narrowest in over a decade.
What stood out in his 15-year journey as a member of the political executive at the Centre was his glowing record as India's most successful and effective finance minister. Both as prime minister and finance minister, he understood the importance of gradualism, except when the economy or the polity was in a crisis.
While the rupee depreciation in 2012 persuaded many companies in taking hedges against their foreign currency loans, industry analysts feel it might not be sufficient to counter the swift slide in the value of the local currency.
The rising price of the precious metal has helped the central bank increase overall forex reserves despite currency reserves not rising, and sometimes even falling.
'India should start leveraging rather than banning crypto.'
The impact of currency depreciation can also be mitigated by holding a portion of your investment portfolio in dollar-denominated assets.
Both Jet Airways and Go First have met with a similar fate of landing up in insolvency, albeit for different reasons. Whether Go First will be able to avoid the sharp erosion in value like in the case of Jet, experts say, will depend on how quickly it is able to restart operations and retain its slots at airports. Go First, owned by the Wadia group, filed for voluntary corporate insolvency resolution on May 2 due to inadequate capacity utilisation that led to a cash crunch.
Disclose foreign assets, redesignate NRO a/c and open a Resident Foreign Currency a/c to park forex earnings
Crypto-assets are essential to blockchain technology, which has the potential to be one of the next major growth drivers for the software ecosystem in India. A prohibition would nip this opportunity in the bud, say Vaibhav Parikh and Jaideep Reddy.
Ongoing trade-war rhetoric between the US and China added some nervousness on the trading front coupled with extremely bullish dollar sentiment overseas.
'To the believers of crypto regulations, I have only one question to ask, how will you regulate it?'
The fall in reserves was due to a sharp fall in foreign currency assets.
RBI will take a cue from the Fed policy statement.
Pakistan Prime Minister Shehbaz Sharif's wife and former premier Imran Khan's wife have financial assets worth more than their husbands.
This was the companies' highest loss in two years.
'If you look at where inflation (headline and core) is today in India and where the rates are, there's clearly room to cut rates.'
India's forex reserves recently declined by $704 million to $354.517 billion.
The RBI is still a small player in international gold buying among central banks. But in terms of total gold bought in 2019, it is the sixth largest buyer with 25.2 tonnes purchases in the first 10 months of 2019.
RBI is expecting the rupee to stay close to Rs 75 to a dollar, as COVID-19 forces foreign funds to withdraw from emerging markets.
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