• Friday, December 15, 2017

India’s forex reserves top $400 billion for the first time

Discussion in 'Central & South Asia' started by Abhijeet Sarkar, Sep 15, 2017.

  1. Abhijeet Sarkar

    Abhijeet Sarkar BANNED

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    India’s foreign exchange reserves rise past $400 billion for the first time ever, strengthening policy makers’ buffers ahead of an expected reduction in US stimulus

    [​IMG]
    India’s holdings are about $376 billion now if stripped of gold, enough to pay for about a year of imports. Photo: Reuters
    Mumbai: India’s foreign-exchange reserves rose past $400 billion for the first time ever, strengthening policy makers’ buffers ahead of an expected reduction in US stimulus.

    The stockpile stood at $400.7 billion 8 September, the Reserve Bank of India (RBI) said in a release on Friday. With the Federal Reserve set to shrink its balance sheet—details of which could be announced next week—the holdings may help the rupee withstand any volatility even if global funds turn away from India’s slowing economy.

    “We expect portfolio inflows to slow in the coming months,” said Radhika Rao, an economist at DBS Bank Ltd in Singapore. She predicts India’s current account deficit will double to 1.4% of gross domestic product (GDP) in the year through March 2018.

    That’s still far lower than the unprecedented 4.8% of GDP touched in 2013, when the Fed had first signalled intent to curb its massive bond-buying program. Those “taper tantrums” triggered a sharp slide in the rupee and reserves depleted to around $275 billion as the central bank struggled to buoy the currency.

    India’s holdings are about $376 billion now if stripped of gold, enough to pay for about a year of imports. The pace of reserve accretion has been one of the strongest within Asia in the past 12 months, according to analysts at Morgan Stanley, creating a challenge for the central bank, which has been intervening and mopping up the inflows.



    The RBI last month cut interest rates to the lowest in seven years to boost flagging growth. At the same time, it has been absorbing surplus funds in the banking system to keep price pressures under control. Inflation has been rising sharply from record lows, and the central bank wants it to stay near the 4% mid-point of its target range.

    The rise in foreign exchange reserves comes as yield-hungry global investors take advantage of high real rates of interest and a rupee that has gained more than 6% this year against the dollar. That may change in the months ahead as accelerating inflation in India erodes returns.

    Foreign holdings of rupee debt have risen by just 20.9 billion rupees ($326 million) so far in September and August’s 126-billion rupee inflow was the smallest in six months, as investors have used up almost all of their eligible quotas to buy Indian bonds. In the freer equity market, overseas investors have withdrawn $810 million this month, extending last month’s $1.7 billion outflow. Bloomberg

    http://www.livemint.com/Money/yaSVf...erves-top-400-billion-for-the-first-time.html
     
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  2. Tangent123

    Tangent123 FULL MEMBER

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    Now, it's Prabhu's job to take it to 500.
     
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  3. doe33

    doe33 BANNED

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    Good development :tup:
     
  4. Han Warrior

    Han Warrior SENIOR MEMBER

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    How much is the foreign debt?
     
  5. jetray

    jetray FULL MEMBER

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    No point in hoarding money, developing countries should utilize it well. Our import deficit should be around $150 billion dollar, if we cover that plus some extra we should be good enuf.
     
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  6. beijingwalker

    beijingwalker BANNED

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    Still smaller than Hongkong, amazing for a country of 1.4 billion people and Hongkong's population is 6 million.
     
  7. Han Warrior

    Han Warrior SENIOR MEMBER

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  8. SOUTHie

    SOUTHie BANNED

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    Throwing random words like "amazing" huh!. There is nothing amazing, India is only developing and we don't have manufacturing power that China has. Nor the Business holdings Hong Kong has. And many of the Hong Kongs success is due to the British, who returned HK in a good shape. Rather HK was well developed when British Left compared to China.

    While Mainland China had the amazing growth due to manufacturing sector and rapid infrastructure development which overshadow HK now.
     
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  9. Abhijeet Sarkar

    Abhijeet Sarkar BANNED

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    India once contributed 23% of world's GDP.When British left after deprivation & slavery it was left with 3% GDP & 90% poverty rate.Considering that fact within span of 70 years it's more than good what we have achieved.I don't know how could you people feel good comparing with India..Lel seriously
     
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  10. Syama Ayas

    Syama Ayas ELITE MEMBER

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    British were good with Hong Kong's economy.

    No wonder many Hong kongers wants to go back to being a British

    [​IMG]
     
  11. beijingwalker

    beijingwalker BANNED

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    I think India was in a much better shape when it was established comparing to the war battered China which basically had nothing to inherit.

    They are not the majority and they can go to Britain and we won't stop them.
     
  12. Syama Ayas

    Syama Ayas ELITE MEMBER

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    They believe they more right to Hong kong than mainlanders:

    Heck they even hate mainland tourists :(

    [​IMG]

    Hong Kong was classified as a developed nation before transfer to China
     
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  13. beijingwalker

    beijingwalker BANNED

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    It's never a country. a little knowledge for you . and it's still a developed region and more developed than when it was handed over.

    People Promoting Hongkong Indepence Got Slapped in Public