tag:blogger.com,1999:blog-5848640164815342479.post4912819239298198617..comments2024-03-27T15:36:44.737-07:00Comments on Haq's Musings: India's GDP Shrank to $1.84 Trillion in 2012-13 in US Dollar TermsRiaz Haqhttp://www.blogger.com/profile/00522781692886598586noreply@blogger.comBlogger45125tag:blogger.com,1999:blog-5848640164815342479.post-79592944145725578932014-09-26T08:24:17.682-07:002014-09-26T08:24:17.682-07:00Has the Indian economy shrunk over the last one ye...Has the Indian economy shrunk over the last one year? A PTI press release states that India's economy is expected to grow to $1.7 trillion by the end of the financial year 2013-2014. But how much was the Indian economy's size previous year? In dollar terms was it less or higher than $1.7 trillion? Interestingly as per an IMF report, name World Economy Outlook published in April 2013, the Indian GDP for the financial year 2012 was $1.8 trillion and was expected to be $1.9 trillion for the financial year ended 2013-2014. Therefore from that perspective the Indian economy has not risen to $ 1.7 trillion but has actually shrunk in dollar terms from $1.8 trillion to $1.7 trillion at a time when it should have been ideally been $1.9 trillion. In terms of rupees, surely the value of the Indian economy has grown up to Rs 105.39 Lakh Crore from Rs 93.88 Lakh Crore in 2012-2013 <br /><br />Read more at: http://news.oneindia.in/feature/in-dollar-terms-has-the-indian-economy-grown-or-shrunk-1391642.htmlRiaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-4465568173799244002014-02-17T08:30:44.548-08:002014-02-17T08:30:44.548-08:00Sri Lanka's per capita income has quintupled o...Sri Lanka's per capita income has quintupled over the last two decades from about $700 to $3500, significantly outperforming all other South Asian economies. During the same period, <a href="http://www.economist.com/news/asia/21596554-slowly-lights-may-be-coming-again-urdu-rate-growth" rel="nofollow">Pakistan's per capita GDP</a> has increased from $500 to $1300 while India's is up from $400 to $1400.<br><br /><br><br /><br><br />In addition to its high per capita GDP for the South Asia region, Sri Lanka has also excelled on <a href="http://hdr.undp.org/en/countries" rel="nofollow">Human Development Index</a> (HDI), a key indicator of social development assessed each year by the United Nations Development Program (UNDP).<br><br /><br />http://www.riazhaq.com/2014/02/sri-lanka-booms-as-india-pakistan-lag.htmlRiaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-75187662099798112592014-01-29T17:08:47.105-08:002014-01-29T17:08:47.105-08:00US Fed decision to reduce bond purchases from $85 ...US Fed decision to reduce bond purchases from $85 billion a month to $65 billion a month is playing havoc with emerging markets. The Indian rupee is down some 14% against the USD in the past year. India has a current account deficit of 4.37% of GDP...The Turkish lira is down 24% against the USD in the past year. Turkey has a current account deficit of 7.22% of GDP..The rupiah was the worst performing emerging market currency in 2013 and is down 21% against the USD in the past year. Indonesia has a current account deficit of 3.71% of GDP..The Brazil real is down over 15% against the USD in the past year. Brazil has a current account deficit of 3.59% of GDP..The South African rand is down over 19% against the USD in the past year. South Africa has a current account deficit of 6.8% of GDP..... <br /><br />http://business.financialpost.com/2014/01/28/the-fragile-five-what-you-need-to-know-about-the-5-emerging-markets-causing-chaos-in-world-markets/Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-33131900924848057862013-12-25T21:56:03.780-08:002013-12-25T21:56:03.780-08:00Here's an excerpt of a PBS interview of India&...Here's an excerpt of a <a href="http://www.pbs.org/newshour/bb/world/july-dec13/rajan_12-25.html" rel="nofollow">PBS interview</a> of India's central bank chief Rajan:<br /><br /><i>HARI SREENIVASAN: A few years ago, there was this notion that the developing countries were going to be this new engine. And now you see the BRIC countries, Brazil, Russia, India, China kind of slowing down a bit. India is growing at half the rate it was a couple of years ago. Are we waiting for larger economies to become the power, sort of the steam engine again, or can India rebound on its own?<br /><br />RAGHURAM RAJAN: Well, I think everyone is looking for a new model of growth.<br /><br />And I think India is going to discover that model over time. And -- and that model requires doing things a little differently, more investment, less consumption, more effective implementation of large products. I have no doubt that Indian growth will pick up from 5 percent, where it is now, is not bad. It's bad relative to the 10 percent it was growing at in some years in the past.<br /><br />But going back to higher rates of growth, I think once it figures out how to do things more cleanly and better, I think it will resume that level of growth.<br /><br />HARI SREENIVASAN: So, a few months ago, there was this meme in the Indian press about the price of onions and how they had doubled and in some places tripled. Now the price of vegetables in markets have come down for several reasons, but, really, the bigger question is about inflation.<br /><br />Consumer inflation in India is 11 percent and almost 11.25 percent this month. How does the central bank address that, especially when the poor feel inflation on food and fuel prices disproportionately hard?<br /><br />RAGHURAM RAJAN: Absolutely.<br /><br />I think it's a important challenge. I think, as you said, vegetable prices have come down. There's a spike. They have come down substantially since then. So, we should see some of that inflation fall off. But whether it's 9 or whether it's 11, it's still too high. We need to bring it down.<br /><br />Some of it has to be done by addressing the supply constraints in the economy. That will happen over time. But we have to also ensure that, from the central bank's perspective, we send a clear signal that higher rates of inflation will not be tolerated.<br /><br />I think you have to bring both sides together to get inflation down to healthy levels.<br /><br />HARI SREENIVASAN: Help us understand the balance between growth and inflation. Right? On the -- there are estimates that about a million new Indians will enter the work force -- or, I should say, be of working age every month for the next 10 years.<br /><br />So how does the central bank create an environment where you can actually create jobs for all those people without contributing to inflation?<br /><br />RAGHURAM RAJAN: Well, the first thing is, we don't directly have an effect on growth, other than through maintaining inflation relatively low.<br /><br />Over the long term, these tradeoffs are -- basically disappear. And, essentially, the best way we can keep growth going is by maintaining a low level of inflation. However, as a developing country central bank, we have additional tools to the ones that developed countries have. We can develop the system. We can ensure, for example, payments reach every part of India.<br /><br />Remittances can be sent by a migrant laborer to his village back at very lost cost. That helps the village flourish, helps more reallocation of labor to places where they can be employed. That can help growth.....</i><br /><br />http://www.pbs.org/newshour/bb/world/july-dec13/rajan_12-25.htmlRiaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-59462085314525500872013-12-25T09:12:29.470-08:002013-12-25T09:12:29.470-08:00At Rs 61.79 to a US $ today, Indian economy as of ...At Rs 61.79 to a US $ today, Indian economy as of March 2013 is about $1.62 trillion.<br /><br />Indian rupee now appears to settling around 61 to 62 to a US $. Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-18184667603000067212013-09-15T23:42:16.362-07:002013-09-15T23:42:16.362-07:00Don't panic guys. India's currency would b...Don't panic guys. India's currency would be back to it's normal range (somewhere in 50s) around Match, 2014. It is still undervalued @ 62.50. This government (I hate them) still has 6 months or so to save it's ever declining reputation. They are coming up with number of reforms and investment friendly policies to increase their vote bank before general elections in May, 2014. With expected growth rate of 5.3% and rupee in 50s, GDP would stand close to whopping 2 trillion dollars by March, 2014. Forget about rupee going back to 45 level again. Gone are those days. Every currency in this world gets devalued sooner or later. Don't forget that rupee was around 45 for nearly 10 years. So, it was bound to fall someday. As per Corporates and Business houses, rupee in mid 50s would do a lot of good for Indian economy. What happens in India is that when we put hell of pressure on our government, then only they rush with number of reforms. Otherwise, they are always yawning and snoring. Don't just look at negatives, look at positives too:-<br /><br />1. World's largest food bill/scheme for 70% population i.e. 840 million people of India.<br /><br />2. India is fast becoming a 'Superpower' in IT/technology if not economically.<br /><br />3. India has almost completed it's 'Nuclear Triad' to strengthen it's military. It's now 3rd or 4th strongest military in the world just behind US, China in terms of technolgy, strategy, personnel, budget, etc.<br /><br />4. India is going to Mars in November, 2013. Just two months from now. Only 'US' has done it before as per my knowledge.<br /><br />5. Land bill and Pension bill passed too.<br /><br />6. India has started with it's biggest ever infrastructure project worth 100 billion dollars. It's called Delhi-Mumbai Industrial Corridor where 20 cities would be developed by 2040. It would create millions of jobs and strengthen our manufacturing and ultimately economy.<br /><br />7. Current Account deficit would be down to 70 billion dollars by March, 2014. Just 3.8% of economy.<br /><br />8. Growth rate would be atleast 6% to 6.5% in next fiscal year. Mind you, it's gonna jump in the third quarter of this year too.<br /><br />9. Catching terrorists, death sentences for rapists and strengthened national border is a bit encouraging if not much.<br /><br />10. Remittances are at all time high at 70 billion dollars per year. Thanks to 25 milion Indians living abroad making it the world's second largest diaspora.<br /><br />So, there are many positives, ONLY IF YOU CARE TO SEE. Moreover, these are not my predictions but are pure facts. As for some of the world's developed (euphemism for exposed market leaders) nations, don't get too excited about fake recovery because fake optimism without any real efforts is of NO USE. And get ready for another RECESSION coming in about few months time from now. Word of advice:- Don't care about our economy, care about yours first. Word up 'New York Tmes', Bloomberg, Financial Times, BBC, Daily Mail, Guardian, CNN and the likes ....<br /><br />Thank You<br /><br />Dr. Chuttar Chodh<br />Non- Certified Executive<br />Government of IndiaAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-16034251768434943452013-08-27T22:00:58.792-07:002013-08-27T22:00:58.792-07:00The relentless rout of the Indian rupee continued ...The relentless rout of the Indian rupee continued with the currency of the Asia’s third largest economy breaching the key level of 66.00 to the dollar on Tuesday, portending that its abysmal plunge to 70 is well nigh imminent.<br />The rupee’s steep plunge to a new all-time low of 66.24 from 64.30 on Monday was partly on fears over a US-led military strike in Syria, which could push oil prices higher globally, even as investors became more nervous over the astronomical cost of a new move by New Delhi to provide subsidised food to millions of Indians.<br /><br />The inexorable dive of the rupee did little to cheer the bewildered non-resident Indians in the Gulf who are caught in a paradoxical situation with those who remitted the money over the past few weeks ruing over their loss as the fall of the currency continued unabated.<br /><br />In 10 weeks or so, the partly convertible Indian currency lost 22 per cent of its value against the dollar-pegged dirham — from just over Rs14 per dirham in May to Rs18.21 on Tuesday.<br /><br />The new bout of alarm over India’s fiscal deficit in the wake of the $20 billion food security plan eclipsed an announcement by Finance Minister P. Chidambaram that the government had approved infrastructure projects worth $28.38 billion, a step aimed at reviving economic growth and shoring up investor confidence.<br /><br />Despite Chidambaram’s promise on Tuesday that the government would meet its fiscal deficit target, the rupee plumbed new depths.<br /><br />http://www.khaleejtimes.com/biz/inside.asp?section=forex&xfile=%2Fdata%2Fforex%2F2013%2FAugust%2Fforex_August21.xmlAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-60400295511276130202013-08-23T22:22:25.012-07:002013-08-23T22:22:25.012-07:00Here's Wall Street Journal quoting BRIC coiner...Here's <a href="http://blogs.wsj.com/moneybeat/2013/08/23/china-only-bric-country-currently-worthy-of-the-title-oneill/" rel="nofollow">Wall Street Journal</a> quoting BRIC coiner Jim O'Neill as saying “If I were to change it, I would just leave the ‘C’:<br /><br /><br /><i>SAO PAULO–Former Goldman Sachs Asset Management Chairman Jim O’Neill, who coined the BRIC acronym describing four burgeoning emerging market countries, stands by the term he invented more than a decade ago, but admits that three of the countries have disappointed him in recent years.<br /><br />The acronym created in 2001 groups Brazil, Russia, India and China, and has become a reference for a perceived shift in economic power toward developing economies.<br /><br />“If I were to change it, I would just leave the ‘C,’” Mr. O’Neill said in an interview. “But then, I don’t think it would be much of an acronym.”<br /><br />Economic growth in other BRIC countries has been disappointing, and the economic outlook for developing economies in general has changed in the last few years amid the end of a commodities boom and a slowdown in Chinese growth–which nevertheless remains high compared with that of its counterparts.<br /><br />Meanwhile, signs of a recovery in the U.S and expectations the Federal Reserve will soon reduce its bond-buying program have helped strengthen the U.S. dollar, sucking money out of emerging markets and putting even more pressure on their less developed economies.<br /><br />It has become “fashionable” to say the developed world is recovering while emerging markets are all slowing down, Mr. O’Neill said. “But what people don’t understand is the size of China,” he added.<br /><br />The economist said that if China’s economy grows 7.5% this year, as he expects, that would create an additional $1 trillion in wealth, in U.S. dollar terms. “For the U.S. to contribute at the same level, it would have to grow around 3.75%,” Mr. O’Neill said.<br /><br />Economists currently expect the U.S. economy to expand 1.5% in 2013, down from 2% projected in May, according to a recent survey by the Federal Reserve Bank of Philadelphia.<br /><br />From 2011 to 2020, Mr. O’Neill said he has assumed average growth for the BRIC countries of 6.6% a year, less than the 8.5% average in the previous decade. Most of it up to now has come from China.<br /><br />India has been the biggest disappointment among the BRIC countries, while Brazil has been the most volatile in terms of investor perceptions, the economist said.<br /><br />“Between 2001 and 2004, many people told me I should never have included Brazil. Then, from 2008 to 2010, people told me I was a genius for including Brazil and now, again, people say Brazil doesn’t deserve to be there,” he said.<br /><br />Brazil’s economic growth, which reached 7.5% in 2010, has been weak since then in spite of multiple government stimulus measures. The country seems doomed to growth of 2% or so in both 2013 and 2014, according to economists’ forecasts.<br /><br />Brazil’s rapid growth in 2010 raised expectations, but many people forgot that the country is vulnerable to big moves in commodities prices, Mr. O’Neill said.<br /><br />Another problem, he said, is that private investment remains a small share of the country’s gross domestic product. Brazil’s investment rate has been stuck at around 18% of GDP, the lowest level of any BRIC country, for a decade.<br /><br />---<br /><br />“They should only worry if there’s a pickup in inflation expectations; otherwise, they should relax,” he said, before the central bank late Thursday unveiled a massive intervention program to provide relief for the currency.<br /><br />Brazilian inflation is currently 6.15%, close to the 6.5% ceiling of the central bank’s target range for 2013.<br /><br />Even in the face of weak growth, Mr. O’Neill says he doesn’t plan to add or subtract letters from his famous acronym.<br /><br />“If, by the end of 2015, there is persistent weak growth in Brazil, India or Russia, then I might,” he said, noting, however, that he expects Brazil to surprise positively in 2015, possibly even in 2014.</i><br /><br />http://blogs.wsj.com/moneybeat/2013/08/23/china-only-bric-country-currently-worthy-of-the-title-oneill/Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-48319846905823340632013-08-23T19:03:46.856-07:002013-08-23T19:03:46.856-07:00Indian rupee continued its downward spiral...down ...<br />Indian rupee continued its downward spiral...down 4.4 percent to a record this week in its worst performance since 1993 on signs the U.S. is getting closer to reducing stimulus that fueled demand for emerging-market assets.<br /><br />At INR 65 to a US $, India's 2012-13 GDP is down to $1.54 trillion....Rs. 100.2 trillion/65. <br /><br />#RBI actions too little too late as #India 's #financialcrisis intensifies. 1990s Asia currency crisis being repeated?Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-14898012939523116532013-08-20T08:06:32.985-07:002013-08-20T08:06:32.985-07:00But foreign exchange is only 280 billion dollars.
...But foreign exchange is only 280 billion dollars.<br /><br />http://indiatoday.intoday.in/story/indian-rupee-devaluation-kaushik-basu-use-foex-reserves/1/300290.html<br />Mayrajnoreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-21818054146936479072013-08-20T07:08:38.774-07:002013-08-20T07:08:38.774-07:00$170 billion due next year is the external debt. T...$170 billion due next year is the external debt. The internal debt is about 600 billion dollars. Just the interest on the debt is 60 billion dollars.Pavannoreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-36956188474337972062013-08-20T07:06:52.924-07:002013-08-20T07:06:52.924-07:00$170 billion in domestic loans, I hope.
What is C...$170 billion in domestic loans, I hope. <br />What is Chidambaram doing? Sounds like he is sleeping.Mayrajnoreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-79418095767274273942013-08-19T20:30:41.805-07:002013-08-19T20:30:41.805-07:00India on verge of financial crisis, says The Guard...India on verge of financial crisis, says <a href="http://www.theguardian.com/business/economics-blog/2013/aug/19/india-financial-crisis-rupee-stock-markets" rel="nofollow">The Guardian</a>:<br /><br /><i>The Reserve Bank of India (RBI) in Mumbai. The country is facing its own financial crisis. Photograph: Vivek Prakash/REUTERS<br />India's financial woes are rapidly approaching the critical stage. The rupee has depreciated by 44% in the past two years and hit a record low against the US dollar on Monday. The stock market is plunging, bond yields are nudging 10% and capital is flooding out of the country.<br /><br />In a sense, this is a classic case of deja vu, a revisiting of the Asian crisis of 1997-98 that acted as an unheeded warning sign of what was in store for the global economy a decade later. An emerging economy exhibiting strong growth attracts the attention of foreign investors. Inward investment comes in together with hot money flows that circumvent capital controls. Capital inflows push up the exchange rate, making imports cheaper and exports dearer. The trade deficit balloons, growth slows, deep-seated structural flaws become more prominent and the hot money leaves.<br /><br />The trigger for the run on the rupee has been the news from Washington that the Federal Reserve is considering scaling back - "tapering" - its bond-buying stimulus programme from next month. This has consequences for all emerging market economies: firstly, there is the fear that a reduced stimulus will mean weaker growth in the US, with a knock-on impact on exports from the developing world. Secondly, high-yielding currencies such as the rupee have benefited from a search for yield on the part of global investors. If policy is going to be tightened in the US, then the dollar becomes more attractive and the rupee less so.<br /><br />But while the Indonesian rupee and the South African rand are also feeling the heat, it is India – with its large trade and budget deficits – that looks like the accident most likely to happen. On past form, emerging market crises go through three stages: in stage one, policymakers do nothing in the hope that the problem goes away. In stage two, they cobble together some panic measures, normally involving half-baked capital controls and selling of dollars in an attempt to underpin their currencies. In stage three, they either come up with a workable plan themselves or call in the IMF. India is on the cusp of stage three.</i><br /><br />http://www.theguardian.com/business/economics-blog/2013/aug/19/india-financial-crisis-rupee-stock-marketsRiaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-61281809714105343722013-08-16T23:13:43.216-07:002013-08-16T23:13:43.216-07:00Here's an excerpt of a Reuters' story on I...Here's an excerpt of a <a href="http://www.reuters.com/article/2013/08/16/us-india-markets-rupee-idUSBRE97F0BG20130816" rel="nofollow">Reuters' story</a> on India rupee hitting a new record low:<br /><br /><i>The central bank's capital outflow restrictions came a day before the dollar spiked after U.S. jobless claims data on Thursday suggested an early end to the Fed's asset purchases.<br /><br />That prospect looms over India at a time when it is suffering from a current account deficit that hit a record high of 4.8 percent of gross domestic product and an economy growing at a decade low of 5 percent.<br /><br />Foreign investors have already sold a net $11.6 billion of Indian debt and equities since late May, sparking fears of continued weakness.<br /><br />India's main NSE index .NSEI fell 4 percent at one point on Friday, while benchmark 10-year bond yields surged to their highest since May 2012 as prices headed for their worst week in four-and-a-half years.<br /><br />UBS strategist Manik Narain said that as emerging central banks tightened policy to defend their currencies, stocks would be affected, something that is already happening in India.<br /><br />"India is losing control over the currency and you are starting to see the weakness transmitting to stock markets. There could be a self-perpetuating cycle where currency weakness flushes out equity investors and that takes the rupee weaker still."<br /><br />CAPITAL CONTROLS?<br /><br />The RBI's new measures also included further capping the amount that companies can invest abroad.<br /><br />But overseas investments from India had already been on the wane, averaging a monthly $400 million in the first half of the year from $710 million in 2012, according to DBS data.<br /><br />The biggest fear is that the RBI's action could be the start of a far stronger move to restrain capital.<br /><br />"The steps taken so far only target residents, but if this raises expectations that they could potentially resort to capital controls targeted at non-residents, that could have adverse near-term implications for capital flows," HSBC's Chief economist for India and ASEAN Leif Eskesen said.<br /><br />"It will, therefore, be critical to tread very carefully when it comes to capital controls, to anchor expectations, and also not use it as a substitute for more appropriate and effective measures," Eskesen said in a note to clients.<br /><br />RUPEE FALLS<br /><br />As policy makers struggling to find a solution for the rupee's falls, investors expect more weakness ahead. Overseas investors betting via one-month offshore non-deliverable forwards quoted the rupee trading at 62.46, while onshore bets see the rupee at 62.35 within the month.<br /><br />Meanwhile, a Reuters poll on Thursday showed short positions in the Indian rupee have hit the highest in two months.<br /><br />At heart of India's failed defense of the rupee so far is that none of the measures unveiled so far have given markets assurance that the country can attract foreign flows in an increasingly difficult global environment.<br /><br />India last month unveiled plans to further ease restrictions on foreign direct investment (FDI) but previous measures have had mixed results. FDI fell to $36.9 billion in the fiscal year ending in March from $46.6 billion the previous year.<br /><br />This week it announced measures to attract near-term capital inflows, including by spurring state-run companies to sell debt abroad and raising funds from Indians abroad.</i><br /><br />http://www.reuters.com/article/2013/08/16/us-india-markets-rupee-idUSBRE97F0BG20130816Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-12859127461266234042013-08-14T22:46:19.156-07:002013-08-14T22:46:19.156-07:00Jim Rogers: Why I’m shorting India
Hedge fund man...Jim Rogers: Why I’m shorting India<br /><br />Hedge fund manager Jim Rogers, who moved to Singapore in 2007 because he thought the centre of the world is shifting to Asia, says India is set to miss out on the Asian century. The chairman of Rogers Holdings says that if there is one country an individual must visit, it has to be India for its “spectacular sensory feast, beautiful, food, colour and religions”, but it is also the worst country to do business in. Rogers also slammed the Indian government’s recent curbs on gold imports, saying Indian citizens had no choice but to buy the metal because they had very little faith in investing in other sectors of its economy. In an interview, Rogers spoke about the financial crisis and his bets for the future and defended his decision to be extremely negative about India in his just-released book Street Smarts: Adventures on the Road and in the Markets.<br /><br />http://www.livemint.com/Companies/pqNgQUDoOPsQCli4EgZLMM/Jim-Rogers-Why-Im-shorting-India.htmlRiaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-22272904310969561312013-08-09T16:57:00.629-07:002013-08-09T16:57:00.629-07:00Here's Hindustan Times on Indian stocks collap...Here's <a href="http://www.hindustantimes.com/business-news/WorldEconomy/Stocks-plunge-on-weak-rupee-India-out-of-trillion-dollar-club/Article1-1104190.aspx" rel="nofollow">Hindustan Times</a> on Indian stocks collapse:<br /><br /><i>Stung by the rupee hitting historic low, stock markets on Tuesday collapsed on all-round selling with the S&P BSE Sensex nosediving by 449.22 points to end below the 19,000-mark, edging India out of the trillion dollar club.<br /><br /> <br />Sentiment was extremely poor on Dalal Street as the rupee plunged to record low of 61.80 against the US dollar, stoking fears of a higher current account gap as import costs surge.<br /> <br />The Bombay Stock Exchange 30-share barometer resumed weak and continued its downslide to end at 18,733.04, a steep fall of 449.22 points or 2.34 %. In the last ten trading sessions, Sensex has fallen in nine days while yesterday has managed to settle in positive terrain.<br /> <br />After today's plunge and the rupee's decline, India's market capitalisation stood at Rs. 60.18 lakh crore, which translates to $989 billion at exchange rate of 60.8 versus the dollar. The rupee retreated from record lows to trade at 60.8 levels at 1710 hours.<br /> <br />Dipen Shah, Head of PCG Research, Kotak Securities said: "Markets ended sharply lower on the back of continuing concerns about the rupee and some disappointing results. The rupee traded at a new low and that caused concerns in market." ...</i><br /><br />http://www.hindustantimes.com/business-news/WorldEconomy/Stocks-plunge-on-weak-rupee-India-out-of-trillion-dollar-club/Article1-1104190.aspxRiaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-26200862590027059952013-08-03T07:51:41.256-07:002013-08-03T07:51:41.256-07:00Anon: "All Indians should start buying gold, ...Anon: "All Indians should start buying gold, seriously... When Indian debt bubble collapses India will be in a bad state.. Im advising you to"<br /><br />Indians' love of gold is in large part responsible for worsening current account deficit and pressure on rupee. That's why Indian govt is rightly restricting gold imports. Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-20349976357350743262013-08-03T07:49:56.860-07:002013-08-03T07:49:56.860-07:00All Indians should start buying gold, seriously......All Indians should start buying gold, seriously... When Indian debt bubble collapses India will be in a bad state.. Im advising you to<br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-52423641158663691562013-08-02T23:09:13.715-07:002013-08-02T23:09:13.715-07:00With Indian rupee's free fall to 61.10 to a US...With Indian rupee's free fall to 61.10 to a US dollar, Indian GDP in USD terms is down to about $1.64 trillion based on Rs. 100.2 trillion divided by 61.10Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-23905167031519393932013-08-02T22:58:12.906-07:002013-08-02T22:58:12.906-07:00Here's India Today on Goldman Sachs' downg...Here's <a href="http://indiatoday.intoday.in/story/goldman-sachs-says-indian-stocks-underweight/1/297403.html" rel="nofollow">India Today</a> on Goldman Sachs' downgrade of Indian economy:<br /><br /><i>US investment bank Goldman Sachs on Thursday downgraded its ratings on Indian stocks, calling them underweight as the rupee continued to tumbling against the dollar and economic growth remains sluggish.<br />The bank said the external funding environment has also become challenging causing the Reserve Bank of India (RBI) to tighten liquidity.<br />The bank also expected corporate earnings to grow at 5 per cent for the current fiscal year and 11 per cent for the next year, below consensus estimates.<br />"Recent activity data in the second quarter of 2013 has been sluggish with no signs of a pick-up in investment demand... Against a backdrop of lower growth, tighter liquidity and rising macro vulnerabilities, we downgrade India to underweight," the bank said.<br />"Our forecast for the dollar-rupee remains at 60 for the year but we expect continued weakness to 65 through 2016. The rupee remains inexpensive relative to our fair value estimate of dollar-rupee 65 which also suggests the currency can continue to weaken," it said.<br />"We even think that there is a greater probability of the RBI keeping liquidity tight even beyond 6 months, and hiking policy rates as well, rather than cutting them," it said.</i><br /><br /><br />Read more at: http://indiatoday.intoday.in/story/goldman-sachs-says-indian-stocks-underweight/1/297403.htmlRiaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-16189563975141010022013-07-23T19:09:14.161-07:002013-07-23T19:09:14.161-07:00Here's Reuters on how India is dealing with re...Here's <a href="http://in.reuters.com/article/2013/07/22/india-rupee-measures-idINDEE96L0CH20130722" rel="nofollow">Reuters</a> on how India is dealing with record slide of Indian Rupee against US dollar:<br /><br /><i> India is considering calling on its millions of non-resident citizens to help reverse a record slide in the rupee and does not favour the idea of a global sovereign bond at this time, senior government officials told Reuters on Monday.<br /><br />However, the government strongly denied having ruled out a sovereign bond issue and said in a statement that "all options are on the table".<br /><br />The officials, who spoke earlier on condition of anonymity, said India was running out of options and time to revive the currency and fund a record current account deficit but equally policymakers were wary of sending any distress signals to international markets.<br /><br />Issuing a global bond might send such a signal, so instead policymakers will focus on attracting funds from Indians living abroad, such as by raising deposit rates in India or issuing bonds specifically designed for them - repeating measures carried out in 1998 and 2000 to steady a weak rupee.<br /><br />The officials declined to be identified because of the sensitivity of discussing government deliberations. They were not immediately reachable for further comment.<br /><br />The officials said other options included an increase in RBI policy rates and allowing select firms to raise capital overseas.<br /><br />"All have agreed that it is not a time for India to issue sovereign bonds at this stage," one official said, adding that the central bank agreed with that position too.<br /><br />"We do not have much options. Whatever has to be done, will be done in the next few weeks," the official said. "We have a window of only few weeks," he said.<br /><br />"The government could ask banks to raise interest rates to attract an additional $15-20 billion," he said.<br /><br />The news prompted the 10-year benchmark 7.16 percent, 2023 bond yield to jump 8 basis points to 8.08 percent, while the rupee ticked lower on the news that a global bond was not being considered right now.<br />---<br />India has the second-largest diaspora in the world, with a community estimated at more than 25 million, the Ministry of Overseas Indian Affairs says.<br /><br />Central bank figures show non-resident Indians (NRIs) held $58 billion in dollar deposits in India as of September 2012, plus local currency deposits worth 3 trillion rupees.<br /><br />Since the rupee's rapid decline, inflows of money from NRIs have risen, the government official said. The currency traded at around 59.70 per dollar on Monday to be about a percent above its record low of 61.21 hit on July 8.<br />-----------<br /><br />"The rating agencies are already watching us closely, we have to manage the situation in a subtle manner," he said.<br /><br />The government's first line of defence therefore would be to woo non-resident Indians, sources said.<br /><br />NRIs lapped up bonds and deposits issued by India in 1998 and 2000, helping bridge massive gaps in India's funding needs. Now, with a current account deficit at a record 4.8 percent of economic output, the country needs all the funding it can get.<br /><br />The government sources said India could consider raising the repo rate, the central bank's main policy rate, if the rupee falls towards 61-62 to the dollar, citing recent meetings between the government and the RBI.<br /><br />The government is also considering allowing select companies such as state-run India Infrastructure Finance Co Ltd or IDFC Ltd (IDFC.NS) to raise up to $4 billion in debt abroad, they said.<br /><br />The first official said state-owned banks are likely to be asked to raise funds from overseas markets to meet their capital needs.<br /><br />"Even if 5-7 banks raise $1 billion each, it will help us," he said. </i><br /><br />http://in.reuters.com/article/2013/07/22/india-rupee-measures-idINDEE96L0CH20130722Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-49957347825228815462013-07-19T22:39:15.382-07:002013-07-19T22:39:15.382-07:00Indian: "Total Ignorance. GDP is not calculat...Indian: "Total Ignorance. GDP is not calculated on daily dollar exchange basis but on long term average basis. India's rupee GDP is 114+ trillion now. So, it is $2 trillion as long as the average is about 57."<br /><br />Nominal GDP is calculated based on exchange rates. Indian rupee has been in a long-term decline for a couple of decades...the long term down trend is not about to reverse itself anytime soon, especially because of <a href="http://www.riazhaq.com/2010/05/soaring-chinese-imports-worry-india.html" rel="nofollow">India's growing twin deficits</a>. <br /><br />http://www.riazhaq.com/2010/05/soaring-chinese-imports-worry-india.html<br /><br />Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-33634780286938187362013-07-19T22:34:08.915-07:002013-07-19T22:34:08.915-07:00Total Ignorance. GDP is not calculated on daily do...Total Ignorance. GDP is not calculated on daily dollar exchange basis but on long term average basis. India's rupee GDP is 114+ trillion now. So, it is $2 trillion as long as the average is about 57. But, average is lower than 57. Currency fluctuation is nothing new. As it goes around, also comes around. In June 2012 it was 57, some time after it was 49, in may 2013 it was 53 , in June 2013 it was almost 62, now it is 59.<br />Indiannoreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-79442585007732703062013-07-12T07:13:44.584-07:002013-07-12T07:13:44.584-07:00^^RH: "Here's a Hindu newspaper report on...^^RH: "Here's a Hindu newspaper report on Indian corporate foreign debt..."<br />------<br /><br />This is not solely about debt. It is about debt (fixed and bonds) PLUS equity. And it is not solely about corporate matters, it also includes banking capital and government debt.<br /><br />Please correct yourself.<br /><br />If you need to know India's debt situation by itself, and also what portion of the Net International Investment Position is actually debt, you can go directly to the source:<br /><br />http://www.rbi.org.in/scripts/BS_ViewBulletin.aspx?Id=14331Hopewinshttps://www.blogger.com/profile/07885301987622998733noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-55439591708952007972013-07-11T20:42:31.145-07:002013-07-11T20:42:31.145-07:00^^RH: "Structural advantages like abundant mi...^^RH: "Structural advantages like abundant mineral wealth, positive demographics and, most importantly, inclusive, well-run political and economic institutions make the United States the best bet going forward, she says."<br />------<br /><br />Are these inclusive, well-run economic institutions the same as the failed or bailed-out banks, finance institutions, insurance companies like AIG, WaMU, Freddie mac, Lehman, GM, Goldman etcetera<br /><br />Are these inclusive, well-run political institutions the same as the one that now in perpetual gridlock and brinkmanship over every little thing in Congress?<br /><br />Can you comment?Hopewinshttps://www.blogger.com/profile/07885301987622998733noreply@blogger.com