What's new

India's Forex Reserves Fall As Foreign Investors Head For The Exits

@RiazHaq

Brof sb,

How sensitive is the PKR to the "inversion in the US curve"? Presumably less than the INR

Regards

India relies a lot more on foreign investors than Pakistan. So when the US Fed makes big moves, it affects India much more than Pakistan. The top contributor to India's forex reserves is debt (a lot of bonds sold to western investors) which accounts for 48%. Portfolio equity investments are known as “hot” money or speculative money flows accounted for 23% of India's forex reserves

 
.

Why India’s World-Beating Growth Isn’t Creating Jobs​



ByDavin
July 15, 2022


Why India’s World-Beating Growth Isn’t Creating Jobs

Remark

No different main economic system has been increasing as quick as India these days, beating each China and the US. However past the headlines lies the grim actuality of rising unemployment. The nation of 1.4 billion individuals isn’t creating sufficient jobs for its rising workforce, regardless of marketing campaign guarantees by Prime Minister Narendra Modi to make it a precedence. Output is rising on account of pandemic-related authorities spending whereas the non-public sector sits on the fence, deterred by dim circumstances for brand new funding. In the meantime, pandemic-related disruptions and rising inflation are making it tougher for everybody to get by. Tensions boiled over in June when indignant youth going through bleak job prospects blocked rail site visitors and highways in lots of states for days, even setting some trains on fireplace.

1. How unhealthy is the roles scenario?
The unemployment fee in India has been hovering round 7% or 8%, up from about 5% 5 years in the past, in accordance with the Centre for Monitoring Indian Financial system, a personal analysis agency. On the identical time, the workforce shrank as tens of millions of individuals dejected over weak job prospects pulled out, a scenario that was exacerbated by Covid-19 lockdowns. The labor power participation fee — that means people who find themselves working or on the lookout for work — has dropped to simply 40% of the 900 million Indians of authorized age, from 46% six years in the past, in accordance with the CMIE. By comparability, the participation fee within the US was 62.2% in June.

2. Who’s most affected?
Girls and the younger. Between 2010 and 2020, the variety of working girls in India dropped to 19% from 26%, in accordance with information compiled by the World Financial institution. As Covid infections surged, a nasty scenario turned dire: CMIE estimated that feminine labor power participation plummeted to 9% by 2022 — placing it in the identical league as war-torn Yemen. Rosa Abraham, an economics professor at Azim Premji College in Bengaluru, who tracked greater than 20,000 individuals earlier than and after India’s first pandemic lockdown in 2020, discovered that girls have been a number of instances extra more likely to lose their jobs than males and much much less more likely to get better work after restrictions lifted. On the identical time, younger individuals are discovering it tougher to get jobs. CMIE estimated the unemployment within the 20-24 age group was 43.7% in June. That compares with 18.4% in Could for the 16-24 class in China, which can be going through a worsening disaster.

3. What’s behind these numbers?
India’s poor system of training and job-training means levels are sometimes thought-about nugatory by employers. In large-scale surveys, employers have stated that lower than half the faculty graduates coming into the workforce have the cutting-edge abilities they want or the flexibility to select them up within the office. So many would-be job seekers resolve as a substitute to proceed their research, be part of members of the family in farming or simply keep house, surviving on rental revenue, pensions obtained by aged family members or authorities transfers. Many ladies are choosing unpaid work from home, caring for aged family and children.

4. Why is that this a trigger for concern?
India has the benefit of youth — half the inhabitants is beneath 30 — however it can begin growing old in coming a long time. If it will get outdated earlier than it develops and will get wealthy sufficient to help everybody, that will have repercussions for the $3.2 trillion economic system. To maintain world-beating development and woo world buyers, Modi wants to make sure there’s a educated workforce for trade to attract on. There’s additionally the potential for social unrest, as illustrated by the protests that erupted in June over a brand new navy recruitment plan that provided shorter contracts and fewer advantages. India must create at the least 90 million new non-farm jobs by 2030, in accordance with a 2020 report by McKinsey International Institute.

5. What’s the federal government doing?
It has introduced plans to rent one million individuals by the top of 2023 to fill vacancies in authorities departments. This system to enlist younger males as troopers on four-year contracts lured a report variety of candidates in its first weeks, regardless of the backlash from some quarters. The federal government says this system will assist increase employment by supplying a educated, disciplined workforce to native trade. Personal sector jobs which can be mushrooming are primarily within the gig economic system, resembling drivers for Uber Applied sciences Inc. or supply employees for Zomato Ltd. To create jobs on a mass scale India wants to spice up manufacturing and that hinges on creating infrastructure, eradicating crimson tape and reviving investor sentiment. With nationwide polls barely two years away, Modi’s opponents have began speaking a couple of labor market disaster.

6. Why not use authorities information?

The federal government in April cited what it known as “genuine information” from the Statistics Ministry displaying the labor market recovering. However economists have described these figures as outdated and insufficient. For starters, they arrive with a lag of 1 12 months: Official information for the 12 months ending June 30, 2021, was solely launched in June 2022. And it confirmed the unemployment fee fell to 4.2% that 12 months, down from an official 4.8% — regardless of harsh Covid lockdowns and an financial slowdown. Markets and academicians choose to depend on the survey-based unemployment information from CMIE because it’s extra well timed and correlates higher with floor realities. The federal government has began some new efforts to get information instantly from companies, and is engaged on extra surveys aimed on the so-called casual sector, resembling migrant laborers and home employees, which covers 75% of the workforce.

Extra tales like this can be found on bloomberg.com

 
.
India is doomed and we hope naive Indian continued to make Modi stay in office so that they will continue have their 2030 Supapowa dream. :lol:

 
.
India is doomed and we hope naive Indian continued to make Modi stay in office so that they will continue have their 2030 Supapowa dream. :lol:

2020 dream has been revived as their 2030 dream. An interesting thing about this video is that even in “Superpowa India” there are still beggars. No aspiration for an egalitarian society where the poor (even foreign born poor residents) are supported enough not to have to beg to survive. Just aspirations to turn the tables on “whitey”. This is the kind of video one would expect anti-globalization nativists in the west would make instead of Indian aspiring to make their country a “superpowa”.

Why India’s World-Beating Growth Isn’t Creating Jobs​



ByDavin
July 15, 2022


Why India’s World-Beating Growth Isn’t Creating Jobs

Remark

No different main economic system has been increasing as quick as India these days, beating each China and the US. However past the headlines lies the grim actuality of rising unemployment. The nation of 1.4 billion individuals isn’t creating sufficient jobs for its rising workforce, regardless of marketing campaign guarantees by Prime Minister Narendra Modi to make it a precedence. Output is rising on account of pandemic-related authorities spending whereas the non-public sector sits on the fence, deterred by dim circumstances for brand new funding. In the meantime, pandemic-related disruptions and rising inflation are making it tougher for everybody to get by. Tensions boiled over in June when indignant youth going through bleak job prospects blocked rail site visitors and highways in lots of states for days, even setting some trains on fireplace.

1. How unhealthy is the roles scenario?
The unemployment fee in India has been hovering round 7% or 8%, up from about 5% 5 years in the past, in accordance with the Centre for Monitoring Indian Financial system, a personal analysis agency. On the identical time, the workforce shrank as tens of millions of individuals dejected over weak job prospects pulled out, a scenario that was exacerbated by Covid-19 lockdowns. The labor power participation fee — that means people who find themselves working or on the lookout for work — has dropped to simply 40% of the 900 million Indians of authorized age, from 46% six years in the past, in accordance with the CMIE. By comparability, the participation fee within the US was 62.2% in June.

2. Who’s most affected?
Girls and the younger. Between 2010 and 2020, the variety of working girls in India dropped to 19% from 26%, in accordance with information compiled by the World Financial institution. As Covid infections surged, a nasty scenario turned dire: CMIE estimated that feminine labor power participation plummeted to 9% by 2022 — placing it in the identical league as war-torn Yemen. Rosa Abraham, an economics professor at Azim Premji College in Bengaluru, who tracked greater than 20,000 individuals earlier than and after India’s first pandemic lockdown in 2020, discovered that girls have been a number of instances extra more likely to lose their jobs than males and much much less more likely to get better work after restrictions lifted. On the identical time, younger individuals are discovering it tougher to get jobs. CMIE estimated the unemployment within the 20-24 age group was 43.7% in June. That compares with 18.4% in Could for the 16-24 class in China, which can be going through a worsening disaster.

3. What’s behind these numbers?
India’s poor system of training and job-training means levels are sometimes thought-about nugatory by employers. In large-scale surveys, employers have stated that lower than half the faculty graduates coming into the workforce have the cutting-edge abilities they want or the flexibility to select them up within the office. So many would-be job seekers resolve as a substitute to proceed their research, be part of members of the family in farming or simply keep house, surviving on rental revenue, pensions obtained by aged family members or authorities transfers. Many ladies are choosing unpaid work from home, caring for aged family and children.

4. Why is that this a trigger for concern?
India has the benefit of youth — half the inhabitants is beneath 30 — however it can begin growing old in coming a long time. If it will get outdated earlier than it develops and will get wealthy sufficient to help everybody, that will have repercussions for the $3.2 trillion economic system. To maintain world-beating development and woo world buyers, Modi wants to make sure there’s a educated workforce for trade to attract on. There’s additionally the potential for social unrest, as illustrated by the protests that erupted in June over a brand new navy recruitment plan that provided shorter contracts and fewer advantages. India must create at the least 90 million new non-farm jobs by 2030, in accordance with a 2020 report by McKinsey International Institute.

5. What’s the federal government doing?
It has introduced plans to rent one million individuals by the top of 2023 to fill vacancies in authorities departments. This system to enlist younger males as troopers on four-year contracts lured a report variety of candidates in its first weeks, regardless of the backlash from some quarters. The federal government says this system will assist increase employment by supplying a educated, disciplined workforce to native trade. Personal sector jobs which can be mushrooming are primarily within the gig economic system, resembling drivers for Uber Applied sciences Inc. or supply employees for Zomato Ltd. To create jobs on a mass scale India wants to spice up manufacturing and that hinges on creating infrastructure, eradicating crimson tape and reviving investor sentiment. With nationwide polls barely two years away, Modi’s opponents have began speaking a couple of labor market disaster.

6. Why not use authorities information?

The federal government in April cited what it known as “genuine information” from the Statistics Ministry displaying the labor market recovering. However economists have described these figures as outdated and insufficient. For starters, they arrive with a lag of 1 12 months: Official information for the 12 months ending June 30, 2021, was solely launched in June 2022. And it confirmed the unemployment fee fell to 4.2% that 12 months, down from an official 4.8% — regardless of harsh Covid lockdowns and an financial slowdown. Markets and academicians choose to depend on the survey-based unemployment information from CMIE because it’s extra well timed and correlates higher with floor realities. The federal government has began some new efforts to get information instantly from companies, and is engaged on extra surveys aimed on the so-called casual sector, resembling migrant laborers and home employees, which covers 75% of the workforce.

Extra tales like this can be found on bloomberg.com


Ssssh, let them squander their demographic dividend. Hopefully, eventually, economists and businesspeople in Pakistan and the rest of the developing from not only what India is getting right but from what it is getting wrong.
 
Last edited:
.
#India’s current account #deficit expected to deteriorate in FY23. The country’s #trade deficit widened to USD 45.18 billion in April-June 2022 period as compared to USD 5.61 billion recorded in the corresponding period of last year. #Modi #BJP #economy


The widening of current account deficit has depreciated the Indian rupee against the US dollar by 6 per cent since January of 2022, and is on the brink of touching 80 mark.

New Delhi India’s current account deficit, meaning a shortfall between the imports and exports, is expected to deteriorate in 2022-23 if recession concerns do not lead to a sustained and meaningful reduction in the prices of food and energy commodities, the Ministry of Finance said in its latest Monthly Economic Review report.

Softening of global commodity prices may put a leash on inflation, but their elevated levels also need to decline quickly to reduce India’s current account deficit.

A sudden and sharp surge in gold imports amid wedding season, as many weddings were postponed to 2022 from 2021 due to pandemic-induced restrictions, is also now exerting pressure on the trade deficit, it said.

The country’s trade deficit widened to USD 45.18 billion in April-June 2022 period as compared to USD 5.61 billion recorded in the corresponding period of last year.

In order to alleviate the impact, the government recently hiked the customs duty on gold from present 10.75 per cent to 15.0 per cent.

“The deterioration of current account deficit could, however, moderate with an increase in service exports in which India is more globally competitive as compared to merchandise exports,” it said.

The widening of current account deficit has depreciated the Indian rupee against the US dollar by 6 per cent since January of 2022, and is on the brink of touching 80 mark.

“The depreciation (in rupee), in addition to elevated global commodity prices, has also made price-inelastic imports costlier, thereby making it further difficult to reduce the CAD,” it said.

A depreciation in rupee typically makes imported items costlier. India’s forex reserves, in the six months since January 2022, have declined by USD 34 billion.

However, the momentum in the Indian economy is holding up better than expected, despite commodity price shocks in the last four months, the report added.

“After a sluggish start, the seasonal rainfall has picked up and it is geographically well dispersed. That is good news too.”
 
. .
It's funny how people find ways to confirm their bias using data, the same economic data but some Chinese and few Muslim country folks see India defaulting Indians see it as all stable.

If you guys are so sure of what's gonna happen why don't you open a position in the market and bet with leverage and make a few million? Easy to say this and that I challenge people to open a trade in futures with leverage and then make economic predictions with so much authority :P
 
.
#India's #Rupee Hits Weakest Level Ever Against the #US Dollar. The #Indian #currency has lost about 7 percent of its value against the #dollar this year, a victim of higher #energy prices and #economic uncertainty. #Russia #Ukraine #Modi #Hindutva #BJP https://www.nytimes.com/2022/07/19/business/economy/rupee-dollar-record.html?smid=tw-share

The Indian rupee touched the weakest level on record against the dollar on Tuesday, another victim of higher energy prices and a stronger greenback.

The rupee has lost about 7 percent of its value against the dollar this year as India has spent more to import sources of energy like crude oil, natural gas and coal. Prices of those commodities have climbed after Russia invaded Ukraine.

Another factor behind the decline of the rupee is uncertainty about the global economy that has, in turn, propelled the dollar to a 20-year high against the currencies of its major trading partners. Investors have pulled money out of India and other developing countries and poured it in to the United States, where the Federal Reserve is raising interest rates aggressively to tame inflation.

“A lot of it is dollar strength rather than rupee weakness,” said Rahul Bajoria, the chief economist for India at Barclays. “It still feels like on a relative basis the rupee has done a lot better,” he said, pointing to the steeper declines in the value of the euro and the British pound against the dollar.

On Tuesday, the rupee briefly crossed 80 to the dollar for the first time. The Reserve Bank of India intervened in the market, as it has in recent months, to bid up the currency, according to local media reports.

Like in much of the world, inflation has slowed economic growth this year in India. Reserve Bank officials responded by unexpectedly raising rates in May, and then again in June, to 4.9 percent. But inflation remains around 7 percent, putting pressure on household budgets.

Prime Minister Narendra Modi’s government has cut taxes on fuel and restricted exports of wheat and sugar. And it has bought more Russian oil, which has become cheaper following sanctions imposed by the United States and Europe.
 
.
@RiazHaq

Brofessor sb,

India's #Rupee Hits Weakest Level Ever Against the #US Dollar.

Modi-fied India looks to be in s**t!

Regards
 
.
#Indian #rupee touches another record low to 80.06 against #US dollar as foreign #investors pull out US $30 billion from the nation’s #StockMarket so far this year amid deteriorating current-account deficit & high #energy prices. #forex #Modi #BJP

The rupee declined to as low as 80.06 per dollar on Tuesday before reversing losses as traders cited possible central bank intervention. The currency has been buffeted by nearly $30 billion of foreign outflows from the nation’s equities so far this year -- a record sum -- and concerns over a deteriorating current-account deficit amid elevated oil and commodity prices.

India policymakers have sought to arrest the currency’s decline with a raft of measures -- from intervention to raising duties on gold imports -- with a weaker rupee adding to imported inflation pressures. Other emerging market currencies are also feeling the heat as a hawkish Federal Reserve lures capital toward the US.

“The risks for the rupee remain to weaken further,” said Dhiraj Nim, economist and FX strategist at Australia & New Zealand Banking Group Ltd. “Oil prices, especially, remain a bit volatile, while external headwinds on account of Fed tightening may continue. The trade imbalance also remains wide.”

India’s central bank sees the rupee as moving toward its fair value and will step in to sell dollars from its reserves when it assesses a genuine shortfall, according to people familiar with the matter. Traders cited RBI intervening in the forex market as the currency breached 80 to a dollar.

The currency has declined 7% this year as a shortfall in India’s current account -- the broadest measure of external finances -- will probably widen to 2.9% of gross domestic product in the fiscal year ending March 31, according to a Bloomberg survey in late June, nearly double the level seen in the previous year. The rupee ended little changed at 79.95 a dollar on Tuesday.

India’s central bank is for an orderly appreciation or depreciation in the currency and is intervening in all market segments to curb volatility, Governor Shaktikanta Das said earlier this month.

Strategists at Nomura Holdings Inc and Morgan Stanley continue to remain bearish on the rupee, forecasting the currency may decline to 82 to a dollar by September. Options pricing suggest that there is 67% probability for the rupee to decline to that level between now and end-December, up from 50% at the start of July.

The Reserve Bank of India has foreign-exchange reserves of almost $600 billion, which it has been deploying to protect the rupee. Authorities have raised duties on gold import and raised levies on petroleum exports. The monetary authority has also announced measures to draw more forex inflows into the country and allowed rupee settlement of trade.
 
.
#India’s #Trade #Deficit Widens to Record On Costly Imports, Weak #Rupee. The gap between #exports and #imports widened to $31.02 billion in July, from $26.18 billion in June. #Modi #BJP #Economy #Inflation #Currency #Forex


India’s trade deficit ballooned to a record high in July, as elevated commodity prices and a weak rupee inflated the country’s import bill.

The gap between exports and imports widened to $31.02 billion in July, from $26.18 billion in June, B.V.R Subrahmanyam, India’s trade secretary, told reporters at a briefing in New Delhi Tuesday, citing preliminary data. The trade deficit in June was a record before the latest numbers were released.
 
.
Whenever INR falls, I feel conflicted somehow. Falling INR is in a sense more lucrative for foreign investors. Personally, I don't feel any pain as my RSU's gets me more money. But then again, I see widening trade deficit. At the end, no idea how should I feel about this.
 
. .

Latest posts

Pakistan Affairs Latest Posts

Back
Top Bottom