Domestic exporters on Monday expressed concerns over the crisis in Bangladesh and said the developments in the neighbouring country would have implications on bilateral trade. However, exporters expect that the situation may normalise soon. According to exporters, they are already facing disruptions in exports to Bangladesh due to a shortage of foreign exchange in that country.
While SGBs are a sound investment, they aren't worth buying at any price. The interest income you earn from them will not justify paying a high premium.
Exchange-traded currency derivatives volumes are likely to drop in view of new Reserve Bank of India (RBI) rules, casting a cloud over further participation of retail investors and proprietary traders. There are concerns that existing positions without any underlying exposure will need to be liquidated. Also, weighed down by dollar demand from local oil companies and weakness in its Asian peers, the rupee on Wednesday (April 3) ended at a new closing low of 83.44 versus the US currency.
The rupee fell 1.87 percent against the dollar this week, its biggest fall since late April.
Benchmark equity indices Sensex and Nifty pared early gains to settle lower on Wednesday due to late selling in index major Reliance Industries, ITC and HDFC Bank even as the RBI took the first step towards a rate cut in its monetary policy review. Erasing its early gains, the 30-share BSE Sensex fell 167.71 points or 0.21 per cent to close at 81,467.1. During the day, it surged 684.4 points or 0.83 per cent to hit an intra-day high of 82,319.21.
Outlook for external sector is the most favourable.
In the swap auction conducted on April 23, the Reserve Bank had received bids worth $ 18.65 billion against $ 5 billion on offer.
The reserves had touched a life-time high of $426.028 billion in the week to April 13, 2018.
Amending the Foreign Exchange Management Regulations, the RBI said that its prior permission would not be necessary where the company whose shares are being transferred is engaged in any financial service.
RBI adds $5 bn to forex kitty since mid-March; rupee breaches 60-a-dollar mark but analysts say central bank will cap further gains
The fall in reserves was due to a sharp fall in foreign currency assets.
Probably 35 bps. There could be even an encore in February 2023 to take the policy rate to 6.5% before the financial year ends, predicts Tamal Bandyopadhyay.
Encouraged by foreign exchange reserves touching record levels, the Reserve Bank on Tuesday doubled the annual overseas investment ceiling for individuals to $2,50,000.
Buch, under a cloud over allegations of conflict of interest levelled by United States-based short-seller Hindenburg, was asked to appear before the PAC, which is reviewing the performance of the market regulator.
Gold, a safe-haven bet, is likely to continue its record-smashing journey in the New Year, rising to Rs 85,000 per 10 grams and even Rs 90,000 level in domestic markets if geopolitical tensions and global economic uncertainties continue.
In the absence of adequate foreign capital flows, it also raises questions about India's foreign exchange reserves buffer and its external vulnerability.
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.
About 281 cases have been taken up for investigation by the Directorate of Enforcement regarding suspected violations of foreign direct investment (FDI) norms all over the country during April 2019 to March this year, Parliament was informed on Wednesday. Necessary action as per provisions of Foreign Exchange Management Act, 1999 (FEMA) has been taken, which includes issuance of show cause notices, adjudication and imposition of penalty, Minister of State for Commerce and Industry Som Parkash said in a written reply to the Lok Sabha. In these cases, following the due process of adjudication, penalties of more than Rs 2,600 crore have been imposed under the FEMA, he said, adding the Reserve Bank of India (RBI) has done compounding of contraventions of FDI related FEMA provisions in total of 1,421 cases across the country during the last three years.
Among the 30 Sensex companies, Power Grid, Axis Bank, State Bank of India, Bajaj Finserv, Reliance Industries and NTPC were the biggest gainers. Tech Mahindra, Infosys, Wipro, HCL Technologies and Titan were among the laggards.
Frantic dollar demand from corporates along with an aggressive hedging strategy adopted by importers in the wake of the currency volatility predominately took a toll on the domestic unit despite moves by the central bank to stabilise the currency.
Finance Minister Nirmala Sitharaman on Wednesday said the Indian economy may have slowed down but there is no threat of a recession.
Rajan said that despite easy liquidity, banks have passed rate cuts into lending rates modestly.
Along with the Finance Minister, the country looks up to RBI Governor in times of crisis. Among the last five chiefs, who have lived up to the people's expectations? Find out...
China's move to devalue its currency has exposed the fragility of its economy.
'The most important thing is that the psychological signal it is giving to the markets and international markets,' says former finance secretary Arvind Mayaram.
Among its suggestions to the finance ministry, RBI has also said the government should classify private equity under a separate category of foreign investment, or create sub-limits within foreign direct investment or investments by foreign institutional investors.
Caution ahead of key consumer inflation data in the day also weighed.
China keeps most of its foreign reserves in the United States Government securities.
Of the eight RBI governors who have held office since the 1991 economic liberalisation, Bimal Jalan had the longest stint and S Venkitaramanan, the shortest. Current Governor Shaktikanta Das will overtake Bimal Jalan before completing his second term in December, points out Tamal Bandyopadhyay.
Shares of One97 Communications (OCL), which provides financial services under the brand 'Paytm', and has a banking arm Paytm Payments Bank (PPBL), hit the 5 per cent upper circuit at Rs 428.10 on the National Stock Exchange (NSE) in Monday's (February 26) intraday trade. The up move in the stock on Monday came after the Reserve Bank of India (RBI) asked the National Payments Corporation of India (NPCI), in post stock market hours, to look into the possibility of migrating PPBL customers, using the UPI handle '@paytm', to four-to-five other banks.
China's trade has zoomed despite doomsday predictions about the impact of WTO accession, but there are concerns.
Foreign exchange reserves as a percentage of India's total external debt were 73 per cent at the end of December 2015.
The Budget should use the extra RBI surplus to better effect, suggests A K Bhattacharya.
The capital flows have remained volatile in this financial year so far, and are lower than those in the corresponding period of 2007-08. This was mainly because of foreign institutional investors outflows of $7.3 billion till October 10 in FY09 in contrast to net inflows of $18.9 billion in the year-ago period, according to the central bank's report on macro-economic and monetary developments.
The Indian government is once again considering whether it should establish a Sovereign Wealth Fund with an initial endowment of $10 billion. Would that be a wise policy? The answer depends on the fund's objectives. Consider five possible objectives.
President Ram Nath Kovind on Monday said that India has once again established itself as the world's fastest-growing economy. "Due to consistent endeavours, India has again emerged as one of the fastest-growing economies in the world. "GST collection has consistently remained above Rs 1 lakh crore during the last several months," President Kocind said while addressing both Houses of the Parliament at Central Hall ahead of the Budget Session. In the first seven months of the current financial year, the inflow of 48 billion dollars, the President said is a "testimony to the belief the global investor community has in India's growth story."
The central bank also purchased $778 million dollars in May and $650 in June.
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