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

[not_two]

when someone talk about indian failures suddenly you guys pull out paksitan from nowhere and start comparing so you can save face .
what is the size of population and land mass of germany and japan ? just for info sir

If you consider land mass then India is just 4 times larger and forex is fifty times Sir

 

[Imran Khan]

If you consider land mass then India is just 4 times larger and forex is fifty times Sir

i have no bad feelings to told you that our stupid leaders ruined our economy by current account deficit . just to make public happy they imported blindly and make huge mess . do you know pakistan import 110mn$ toilet papers ? 2 years ago it was 20bn$ and now its 3bn$ deficit sir once its gone pakistan will be on better position .deficit is the biggest enemy of Pakistani economy . and our stupid leaders proudly import everything like we are some oil rich country . its total failure . simple boly to ye BSDK itna kamaty nhi jitna uraty hain

 

[not_two]

i have no bad feelings to told you that our stupid leaders ruined our economy by current account deficit . just to make public happy they imported blindly and make huge mess . do you know pakistan import 110mn$ toilet papers ? 2 years ago it was 20bn$ and now its 3bn$ deficit sir once its gone pakistan will be on better position .deficit is the biggest enemy of Pakistani economy . and our stupid leaders proudly import everything like we are some oil rich country . its total failure . simple boly to ye BSDK itna kamaty nhi jitna uraty hain

Modern education under shade of one's culture will be a winning combination .. everything else will take us nowhere.. deficit literally means that country is not giving as much as it is getting from outside ..

 

[925boy]

Imran sb, I wouldn't be too concerned about "Debt". Most of our debts are incurred by private entities. Although the Indian banks (indirectly RBI) are the guarantor, any crisis happens only when all those companies goes under all at once, which never happens. Here is how our debt is
View attachment 662410

govt debt looks ok but private debt looks high.

 

[CrazyZ]

Why Has India's Forex Reserve Continued To Soar To New Highs?
By Olga Robert| Published: Saturday, June 20, 2020, 16:49 [IST]

On Friday, the Indian rupee ended marginally lower at 76.19 against the US dollar and continues to be among the weakest performing currencies in Asia amid the coronavirus pandemic. So far this year, the Indian currency has depreciated by 6.7 percent against the dollar. Meanwhile, the Reserve Bank of India (RBI) on Friday reported a substantial surge of $5.942 billion in India's forex reserves to touch a life-time high of $507.644 billion in the week to 12 June. The country's foreign exchange reserves had crossed the half-a-trillion mark for the first time in the previous week ended 5 June. This amount of forex reserves will be sufficient to cover the country import for one year, economists told PTI.

Why is the Forex Reserve rising?

Analysts say the central bank's move to adding to the reserves week-on-week is to guard against a likely downgrade in India's credit rating or to ensure a bigger transfer of surplus to the government that is revenue starved due to slump in economic activity from the coronavirus pandemic. In fact, RBI has bought about $1 billion of US Treasuries after selling a record $21 billion in March when foreign portfolio investors exit Indian markets at the height of COVID-19 fear. India now holds the 12th rank among the list of nations holding US bonds, surpassing Singapore. Economists see purchases of US treasuries rising in the weeks to come as forex reserves have risen. The central bank invests in US Treasury bonds not for yields but as security against an economic crisis. As uncertainties of the aftermath of the coronavirus pandemic continue, the economic growth rate of India is being repeatedly being lowered. The global economic outlook is also bleak. The Asian Development Bank recently said that it estimates India's economy to contract by 4 percent in the financial year 2020. For developing Asia as a whole, nearly flat growth of 0.1 percent in 2020 has been projected, down from 2.2 percent forecast in April, saying that the containment measures to address the coronavirus pandemic has hampered economic activity and weakened the external demand.

As part of the COVID-19 measures by major central banks around the world, the US Federal Reserve had launched a temporary facility allowing other central banks to swap its Treasuries for dollars so that they don't have to dig into their own reserves so much to intervene. The beneficiaries of the facility have been Taiwan, Thailand, Indonesia and Malaysia, besides India, given that they use US Treasuries as collateral and aren't part of current swap lines, Standard Chartered Plc had said in a note in April. Foreign holdings in the US Treasuries, the world's most liquid sovereign securities, have risen to $157.4 billion in April versus $156.5 billion in March, official data from the US government showed. The top two countries holding US Treasuries are Japan and China, but both have cut their holdings recently. China's total investment is now pegged at $1.07 trillion from $1.08 trillion in March. Singapore holds $146.1 billion worth of US Treasury bonds compared with $151.5 billion in the preceding month.

https://www.goodreturns.in/classroo...e-continued-to-soar-to-new-highs-1161878.html

 

[CrazyZ]

This is an interesting article. Central Bank financial engineering seems to be the main driver for the increase in India's forex. RBI is using the various swap facilities with the federal reserve to buy US treasures in preparation for a India debt downgrade. It seems strange with a weak economy, INR depreciating, exports decreasing and no tourism that India's forex is is increasing.....unless you realize that global economy is being propped up by central banks.

 

[letsrock]

This is an interesting article. Central Bank financial engineering seems to be the main driver for the increase in India's forex. RBI is using the various swap facilities with the federal reserve to buy US treasures in preparation for a India debt downgrade. It seems strange with a weak economy, INR depreciating, exports decreasing and no tourism that India's forex is is increasing.....unless you realize that global economy is being propped up by central banks.

Very interesting perspective. So if you swap US treasuries with dollars (both are roughly equivalent anyway as many treasuries yield close to 0 interest) it shows up as increase of forex ? i did not know that.

 

[Dark1]

Indian stocks are again at 38500 level. They had dropped to 30000 during March virus time.
FII have invested heavily.
Also our company tax rates were lowered. This proved attractive for companies who retained their funds in India . Companies have a habit of registering their companies in low tax countries .
The surge is also due to migrants sending money home due to virus and reduced imports.
Exactly 100b usd up since same period last year.
India is perceived as safe.
Anyone can check the weekly rbi foreign exchange site updates.

 

[letsrock]

Indian stocks are again at 38500 level. They had dropped to 30000 during March virus time.
FII have invested heavily.
Also our company tax rates were lowered. This proved attractive for companies who retained their funds in India . Companies have a habit of registering their companies in low tax countries .
The surge is also due to migrants sending money home due to virus and reduced imports.
Exactly 100b usd up since same period last year.
India is perceived as safe.
Anyone can check the weekly rbi foreign exchange site updates.

ANy actual info on remittances ? how can remittances increase when job markets collapsed in gulf. Stocks increased everywhere as money had no other option but to buy up stocks there is nothing else to buy no stuff is being made, no tourism, no fine dining, no shopping.

 

[Dark1]

ANy actual info on remittances ? how can remittances increase when job markets collapsed in gulf. Stocks increased everywhere as money had no other option but to buy up stocks there is nothing else to buy no stuff is being made, no tourism, no fine dining, no shopping.

Many workers in the mid east are returning to India Pakistan and BD. They are sending all their savings home. All 3 countries are seeing a hike in receivables due to this. One time temporary spike.

 

[letsrock]

Many workers in the mid east are returning to India Pakistan and BD. They are sending all their savings home. All 3 countries are seeing a hike in receivables due to this. One time temporary spike.

AFAIK they dont hoard their money and send in one go. They send continuously every month. Any real data ?

 

[Dark1]

AFAIK they dont hoard their money and send in one go. They send continuously every month. Any real data ?

https://www.google.com/amp/s/m.thew...-workers-abroad-visa-msme-gdp-growth-rate/amp
Dont go by the headlines, read the article. Wire is a anti government propaganda outlet, so has to promote negativity.

 

[letsrock]

https://www.google.com/amp/s/m.thew...-workers-abroad-visa-msme-gdp-growth-rate/amp
Dont go by the headlines, read the article. Wire is a anti government propaganda outlet, so has to promote negativity.

Wire is another liberal brahmin news outlet. Their cousins work for RSS and these guys pretend to be liberals nothing more. There is a spike in jan-mar where a one off could have happened. But corona impact started in late march. We need stats from mar-may and jun-aug to know the real picture.

 

[CrazyZ]

Very interesting perspective. So if you swap US treasuries with dollars (both are roughly equivalent anyway as many treasuries yield close to 0 interest) it shows up as increase of forex ? i did not know that.

There are two federal reserve programs that India can take advantage of. The first is the direct currency swap. The federal reserve will have to hold INR on its books from the RBI and provide the RBI with dollars that they can use to buy treasuries. Very few countries are given this facility since there is more risk to the Federal reserve. This is what allowed India to rebuild its forex when foreign investors fled in March. The second is the “repo” facility to foreign central banks where foreign central banks would receive dollars from the Fed in exchange for Treasuries held by the foreign central banks.

Central bank financial engineering is causing a lot of distortions. So many nations are in recession with mass unemployment, no tourism, weak currencies, and weak exports yet equities and real estate are at record valuations? Doesn't make sense unless you accept that the global economy is being propped up by central banks. This may end in a very nasty fashion. Lets wait and see.

 

[Dark1]

There are two federal reserve programs that India can take advantage of. The first is the direct currency swap. The federal reserve will have to hold INR on its books from the RBI and provide the RBI with dollars that they can use to buy treasuries. Very few countries are given this facility since there is more risk to the Federal reserve. This is what allowed India to rebuild its forex when foreign investors fled in March. The second is the “repo” facility to foreign central banks where foreign central banks would receive dollars from the Fed in exchange for Treasuries held by the foreign central banks.

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