The RBI needs to maintain a healthy contingency reserve so that it can lend its support in case of a bank failure.
Penalties for non-disclosure or inaccurate disclosure of these details can be severe.
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.
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.
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minister Boris Johnson, has resigned his non-executive directorship of a UK-based investment firm linked with the now-withdrawn Adani Enterprises Follow-on Public Offer (FPO).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 rising price of the precious metal has helped the central bank increase overall forex reserves despite currency reserves not rising, and sometimes even falling.
Disclose foreign assets, redesignate NRO a/c and open a Resident Foreign Currency a/c to park forex earnings
'With tuition fees for international students rising, education loans have become critical for bridging the gap between savings, scholarship, and full cost.'
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.
'India should start leveraging rather than banning crypto.'
Ongoing trade-war rhetoric between the US and China added some nervousness on the trading front coupled with extremely bullish dollar sentiment overseas.
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.
The fall in reserves was due to a sharp fall in foreign currency assets.
RBI will take a cue from the Fed policy statement.
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.
This was the companies' highest loss in two years.
India's forex reserves recently declined by $704 million to $354.517 billion.
The impact of currency depreciation can also be mitigated by holding a portion of your investment portfolio in dollar-denominated assets.
Pakistan Prime Minister Shehbaz Sharif's wife and former premier Imran Khan's wife have financial assets worth more than their husbands.
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.
Central bank raises red flag, warns of potential risk
Sanjay Mathur, managing director and head of economics research for Asia Pacific (ex-Japan), Royal Bank of Scotland, tells Business Standard that in the emerging market pack, India needs to learn lessons from Korea and Taiwan, which have managed their economic situations well.
'To the believers of crypto regulations, I have only one question to ask, how will you regulate it?'
People's Bank of China's holding in HDFC stood at 1,74,92,909 equity shares, accounting for 1.01 per cent of the share capital of the company as of March-end, as per exchange data.
The SC's dismissal of the Income-Tax department's plea that companies cannot claim deductions against tax liabilities on account of losses due to foreign exchange rate fluctuations legitimises the way companies were accounting for these forex losses.
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.
The Financial Intelligence Unit (FIU), the federal economic snoop agency under the Union finance ministry, sent 289 legal requests to its counterparts across the globe during 2018-19 as compared to 177 in 2017-18 and 138 in 2016-17.
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RBI's forex swap window for oil marketing companies addresses an urgent issue but what happens when the dollars have to be returned?
On Tuesday, the domestic currency had gained 13 paise to close at nearly four-week high of 60.43 against the American unit following fresh dollar selling by exporters and sustained investments by foreign funds.
At least 10 persons were admitted to the National Hospital after the confrontation between protesters who have currently been staying inside the prime minister's official residence, the Colombo Post news portal reported.
The rupee on Thursday closed at its all-time low of 78.32 (provisional) against the US dollar as strong American currency and persistent foreign fund outflows weighed on investor sentiments. At the interbank foreign exchange market, the local currency opened at 78.26 and finally settled at its all-time low 78.32, unchanged from its previous close. On Wednesday, the rupee declined by 19 paise to settle at an all-time low level of 78.32 against the US dollar.
Foreign portfolio investors' (FPIs') net investment in the domestic debt market in October was the third highest during the current calendar year as foreign investors rushed to lock in higher returns amid global uncertainty and geo-political tensions, market participants said. FPI inflows in debt stood at Rs 6, 322 crore in October against Rs 768 crore in September, according to data on the National Securities Depository Limited (NSDL). Market participants said that the majority of the inflows were channelled through corporate bonds.
'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.'
Investors in international funds should have a horizon of more than five years. Not only will this help them overcome equity and currency volatility, it will also help them enjoy better tax treatment, says Sanjay Kumar Singh.
AMCs can invest $7 billion abroad, and $300 million per AMC, but investments are way below these levels. Most equity schemes can invest 35 per cent of their assets abroad and there are schemes that invest only in overseas equity. What's holding them back is that they are not very sure if they can buy these bonds.
If any foreign account holder violates Indian laws, tax authorities can enforce repatriation of funds.
Led by a new generation of entrepreneurs, India's family offices are shifting from traditional investments in physical and tangible assets like real estate to investing in technology, healthcare, and retail stocks. This new wave of family offices is engaging in stock market investments, including pre-IPO placements and secondary market operations. "Born into a world of technology, the next generation, especially those born after 2000, view technology as equally crucial as finance for running a business.
Banks should start looking for ways to generate more internal capital as the leeway to get additional funds from the government would be limited due to the ongoing fiscal consolidation process, Mundra said.
The Reserve Bank of India (RBI) is precariously balancing two opposing objectives - maintaining easy financial condition in the domestic market, while ensuring external stability - and economists have started taking note. They say India is going through the classic trilemma of the 'Impossible Trinity'. The RBI cannot have an independent monetary policy (setting domestic interest rates) in an environment of an open capital account and flexible exchange rates. What is even more complicated for the central bank now is that financial market stability overlays all the other three objectives.
