India’s forex reserves increase by $11.9 billion to hit $534.5 billion

[CIA Mole]

To fellow Indians, are these figures roughly right do you think?

 

[srshkmr]

To fellow Indians, are these figures roughly right do you think?
View attachment 662516

TBH, I think this is roughly accurate.

 

[not_two]

To fellow Indians, are these figures roughly right do you think?
View attachment 662516

Minimum salary is around 14000/- per month ..labour laws are strict now ..There may be exceptions but above graph looks outdated by about six years..

 

[srshkmr]

Minimum salary is around 14000/- per month ..labour laws are strict now ..There may be exceptions but above graph looks outdated by about six years..

Not all jobs have 14000 min salary. Its been slowly implemented.

 

[not_two]

Not all jobs have 14000 min salary. Its been slowly implemented.

Yes that's true ..it's not uniform in every states ..

 

[CrazyZ]

I am sure you have some sources for the Indian context ? If no, i understand..

According to data available on RBI website, the central bank’s dollar reserves came down to $437 billion as on 27 March from $447 billion a week earlier, Photo: Reuters

Dhirendra Tripathi

• The move will help stabilize markets, reduce volatility and ease pressure on currencies like the rupee
• A source said the RBI had expressed the desire for a currency swap agreement with the Fed due to pressure on the rupee

NEW DELHI : The US Federal Reserve on Tuesday gave the Reserve Bank of India (RBI), as well as all other central banks, currency swap facility to help them fund their dollar requirements. The facility was so far extended to select central banks that did not include the RBI or the People’s Bank of China.

The Fed’s move is a very positive and accommodative step and will help stabilize markets, reduce volatility, and ease pressure on currencies such as the rupee, said analysts

RBI had recently, albeit informally, requested the Fed to be given this facility, said a person aware of the development. The facility, effective 6 April, will be in place for at least six months, the Fed said.

The RBI did not respond to emailed queries if it had recently sought this facility. The RBI, under its former governor Urjit Patel, had in 2017 urged the Fed for access to the facility, then enjoyed by the European Central Bank, the Bank of Japan, the Bank of England, and some others.

The RBI had expressed the desire for a currency swap agreement with the Fed because of the pressure on the rupee over the last couple of weeks, said the person cited above. On 19 March, the Fed had announced currency swap agreements with some of the world’s top central banks with the aim of containing the risks of shortage of dollars in global markets. It however excluded India at the time.

With the currency swap option being given to central banks and other international monetary authorities, they can now enter repurchase agreements with the Fed and temporarily exchange their US treasuries held with it for US dollars.

World markets, be they equities, bonds, oil, currency, or others, have been in turmoil over the past month because of fears of recession, caused by the rapid spread of Covid-19. Most equity markets have plunged 30%-40%, while crude touched 18-year lows to trade below $20.

India’s healthy dollar reserves notwithstanding, RBI believes that currency swap lines can provide it with much needed ammunition to stabilize trade and forex outflows during volatile times such as the current crisis. The central bank’s dollar reserves fell to $437 billion as on 27 March from $447 billion a week earlier, due to the selling in the markets but still remain robust, according to RBI data.

The uncertainty has led to a surge in demand for the world’s safest currency, causing it to appreciate significantly against other currencies. In the first three months of 2020, the rupee has weakened by 5.5% against the US dollar. It closed at 75.63 against the greenback on Tuesday. It had weakened to an all-time low of 76.33 on 23 March, a 6.5% erosion since 31 December.

https://www.livemint.com/news/india...ing-facility-rbi-wants-it-11585667097370.html

 

[CrazyZ]

Most federal reserve currency swap facilities are $60 billion. RBI already has a $75 billion currency swap deal with Bank of Japan. India could increase its forex reserves by $135 billion simply by using central bank currency swaps.

According to this article RBI is being secretive about whether it is using this facility. Also in this article it indicates India's forex reserves were in decline before the currency swap facility was given.

 

[Dark1]

Most federal reserve currency swap facilities are $60 billion. RBI already has a $75 billion currency swap deal with Bank of Japan. India could increase its forex reserves by $135 billion simply by using central bank currency swaps.

According to this article RBI is being secretive about whether it is using this facility. Also in this article it indicates India's forex reserves were in decline before the currency swap facility was given.

RBI probably used this facility.
Seems to be a useful tool but as per article you have quoted,

With the currency swap option being given to central banks and other international monetary authorities, they can now enter repurchase agreements with the Fed and temporarily exchange their US treasuries held with it for US dollars.

So India uses its treasuries already held with USA ?

Now reserves are 538 b usd , including 46 b usd of gold reserves and imf drawing rights. Currency is 492 b usd.
The US agreement came into force on 6th april , while India's foreign exchange reserves were already at 474 b usd as per April 3rd rbi report.
India probably hedged against shocks due to the virus or war with China and used this facility .
Interestingly india which maintained its gold reserves at 30 b usd for some time, increased it to 40 b usd in a months time.
Buying gold is spreading the risk due to the current economic situation in the world.

 

[Sam.]

Minimum salary is around 14000/- per month ..labour laws are strict now ..There may be exceptions but above graph looks outdated by about six years..

In our state it is 9600 minimum wage so no salary below that.

 

[letsrock]

Most federal reserve currency swap facilities are $60 billion. RBI already has a $75 billion currency swap deal with Bank of Japan. India could increase its forex reserves by $135 billion simply by using central bank currency swaps.

According to this article RBI is being secretive about whether it is using this facility. Also in this article it indicates India's forex reserves were in decline before the currency swap facility was given.

Indian govt agencies are always secretive being brahminical and chanakyan organization. THe most gullible are indians themselves who fanatically follow their so called "nation".

 

[Surya 1]

• By: FE Bureau
• August 8, 2020 4:15 AM

India's forex reserves increase by $11.9 billion to hit $534.5 billion
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India’s forex reserves continued to hit record-high levels as they rose by $11.938 billion on July 31 compared to the week before to $534.568 billion, according to the latest data put out by the Reserve Bank of India (RBI).

Foreign currency assets (FCA), which form a key component of reserves, rose by $10.347 billion to $490.829 billion. FCAs are maintained in major currencies like the US dollar, euro, pound sterling and Japanese yen.

Movement in the FCA occurs mainly on account of purchase or sale of foreign exchange by the RBI, income arising out of the deployment of foreign exchange reserves, external aid receipts of the government and revaluation of assets.

Gold, which is another component of the reserves, rose by $1.525 billion to $37.625 billion. Special drawing rights (SDR) from the IMF increased by $12 million to $1.475 billion while reserve position in the IMF increased by $54 million to $4.639 billion.

‘The central bank could have absorbed some of the FDI money in recent times. That is why we are seeing the rupee remaining stable in recent times rather than seeing a significant appreciation,’ a currency dealer said.

Over the last three weeks, rupee has remained in a tight range of 74.74-75.04 against the dollar. Since the beginning of 2020, the rupee has depreciated by 4.74%.

A BofA Securities report dated July 21 states Indian markets will likely see greater portfolio inflows going ahead as adequate forex reserves cut rupee risks.

“Finally, Indian corporates should be able to raise money abroad cheaper. On balance, we continue to expect the RBI to continue its asymmetrical forex policy of buying forex when dollar weakens and allowing depreciation if it strengthens. Our BoP estimates place FY21 RBI forex intervention at $45 billion. The RBI will likely be able to sell $50 billion to ward off any speculative attack on the rupee,” the report stated.

India is going to be a trade sirpsur economomy by 2021. Last quarter of 2019-20 witnesed a marginal surplus. Oil imports are decreasing. Restriction on Chines goods will save about 35 billion US Dollars. in trade with China, so financia year 2021 22 is likely to be a huge trade surplus year. Indian diaspora is the diaspora which sends more than 80 billion US dollars of remittance to home country. This will club with huge trade surplus. So in all in all hone about 150 to 200bn US billion Foreign Exchange Reserves to be added in Indian treasure every year. India is likely to surpass 1 trillion US dollars reserve by the the second term of Narendra Modi i.e before 2024. As a result of a big quantity of foreign exchange reserve, Indian foreign currency exchange rate is likely to surge by huge Margin which will add a big amount of nominal GDP of India. 5 trillion US dollar economy target by 2024 seems very much possible in nominal term. Indian economy will be third in the world by 2024 and first by fifth decade of this millennium.

 

[Capt. Karnage]

India is going to be a trade sirpsur economomy by 2021. Last quarter of 2019-20 witnesed a marginal surplus. Oil imports are decreasing. Restriction on Chines goods will save about 35 billion US Dollars. in trade with China, so financia year 2021 22 is likely to be a huge trade surplus year. Indian diaspora is the diaspora which sends more than 80 billion US dollars of remittance to home country. This will club with huge trade surplus. So in all in all hone about 150 to 200bn US billion Foreign Exchange Reserves to be added in Indian treasure every year. India is likely to surpass 1 trillion US dollars reserve by the the second term of Narendra Modi i.e before 2024. As a result of a big quantity of foreign exchange reserve, Indian foreign currency exchange rate is likely to surge by huge Margin which will add a big amount of nominal GDP of India. 5 trillion US dollar economy target by 2024 seems very much possible in nominal term. Indian economy will be third in the world by 2024 and first by fifth decade of this millennium.

I am worried about the retaliation by countries like US and others against our protectionist policies. We should ban trade only with countries like China and Pakistan but allow imports from others so that it doesn't affect our trade relations with our allies adversely.

 

[Mista]

all Government issue bonds to support their Covid 19 measures

Not Singapore yo.

14 Aug 2020: Fitch Ratings has affirmed Singapore's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'AAA' with a Stable Outlook.

KEY RATING DRIVERS

Singapore's 'AAA' rating reflects its exceptionally strong external and fiscal balance sheets, high per capita income, favourable business environment and sound macroeconomic policy framework. These strengths have remained intact under the stress of the coronavirus pandemic, and mitigate Singapore's vulnerability to external shocks emanating from its high trade dependence and financial sector's global linkages. To counter the economic effects of the pandemic, the authorities have implemented sizeable relief measures financed through the drawdown of accumulated financial buffers, which remain substantial.

The authorities acted swiftly at the onset of the virus outbreak and have implemented unprecedented fiscal relief measures to cushion the economy. Support measures aim to prevent job losses, and include direct cash transfers to households, and support for corporates and SMEs. The first budget for the fiscal year ending March 2021, presented in February, included COVID related expenditure of SGD6.4 billion, which was followed by three additional budgets, taking combined relief measures to SGD92.9 billion or about 19.7% of estimated 2020 GDP. Fitch expects the central government deficit to widen to 15.7% of GDP from 0.3% of GDP in 2019, in line with the authorities' forecast of a deficit of SGD74.3 billion.

The financing of the relief package consists entirely of the use of fiscal reserves accumulated during the terms of the current and previous governments. Singapore's combined fiscal and foreign-exchange reserves will remain substantial at between 200% and 300% of GDP, according to Fitch's estimates, even after this financing. Based on the publicly disclosed information, including assets managed by the Monetary Authority of Singapore (MAS) and Temasek Holdings Private Limited, Singapore will remain a large net external creditor of around 300% in 2020, far stronger than the -20.4% of the 'AAA' median. (Singapore does not disclose the overall size of its official external assets, notably those of GIC Private Limited, a sovereign wealth fund; GIC states publicly that it manages over USD100 billion of assets, but Fitch believes the size of its external assets is much larger).

The government continues to adhere to its policy of issuing debt only to develop the local bond market and create savings vehicles for residents, and facilitate investment by the Central Provident Fund as part of the pension system mechanism; hence the increase in the budget deficit will not lead to a corresponding rise in government debt. As the crisis subsides, we expect the authorities to revert to their policy of maintaining fiscal balance over the cycle of the government's five-year term.

https://www.fitchratings.com/research/sovereigns/fitch-affirms-singapore-at-aaa-outlook-stable-14-08-2020

 

[Dark1]

Not Singapore yo.

https://www.fitchratings.com/research/sovereigns/fitch-affirms-singapore-at-aaa-outlook-stable-14-08-2020

Singapore seems to be doing better.
But these rating agencies have a pretty poor record as seen by their AAA ratings for companies like enron in 2001 or so many western companies like Lehman bros and fannie mae before the 2008 crash which were AA or AAA rated days before bankruptcy. Many were based in Singapore.
Singapore is pretty vulnerable as its a highly financial and services based economy. When the world economy tanks, Singapore cannot live in a bubble.
If you read the ratings history of these agencies, so many instances of paid ratings, buddy to buddy ratings, ratings under pressure, etc.
A hard time for investments as even though government in India has raised its insurance coverage for depositors from 1 to 5 lakhs for individual banks, people normally have a lot more funds and i have had to open 3 new bank accounts in the last 2 months to park funds, as my old banks are assuring only 5 lakhs insurance coverage. And all the old banks are AAA but the situation is unprecedented and ratings are meaningless.

 

[Mista]

Singapore seems to be doing better.
But these rating agencies have a pretty poor record as seen by their AAA ratings for companies like enron in 2001 or so many western companies like Lehman bros and fannie mae before the 2008 crash which were AA or AAA rated days before bankruptcy. Many were based in Singapore.
Singapore is pretty vulnerable as its a highly financial and services based economy. When the world economy tanks, Singapore cannot live in a bubble.
If you read the ratings history of these agencies, so many instances of paid ratings, buddy to buddy ratings, ratings under pressure, etc.
A hard time for investments as even though government in India has raised its insurance coverage for depositors from 1 to 5 lakhs for individual banks, people normally have a lot more funds and i have had to open 3 new bank accounts in the last 2 months to park funds, as my old banks are assuring only 5 lakhs insurance coverage. And all the old banks are AAA but the situation is unprecedented and ratings are meaningless.

Nothing is perfect; a AAA rating doesn't mean 0% risk. It just means it's the safest class of debt investment.

And Singapore's financial position remains stronger than many other AAA countries as quoted in my post above.