India's forex reserves to fall another $15 billion by end-2022

[casual]

@Cheepek @Indos

While India has a substantial trade deficit for sure, once trade in services (think about the zillions of dollars of IT services export) and remittances are factored in the net CAD is much lower- projected at US$ 120 bn for FY 2023. We have FDI of around USD 80 odd billion (60 as equity, 20 as debt) which brings down total BOP deficit at around USD 40 billion. So even accounting for some outward FDI and portfolio exits, we are still looking at gap of 60 billion or so. By March 23, our forex reserves should be in the range of 460-80 billion which is not alarming.

Regards

Strong dollar is looking to stick around till at least end of 2023. In the mean time it will be a stress test for countries around the world. Countries with high trade deficit and debt burden are looking at high inflation or deep recession or both.

 

[kaykay]

Indian forex reserves have increased by 40 billion usd since this article. ROFL