No Result
View All Result
  • Login
Wednesday, August 17, 2022
Afternoon Voice
SUBSCRIBE
  • Home
  • Top News
  • City News
  • Nation
  • World
  • Business
  • Entertainment
    • Bollywood
    • Hollywood
  • Sports
    • Cricket
    • Hockey
    • Tennis
    • Football
    • Badminton
  • Editorial
  • Opinion
    • Column
    • Diary
    • Letters
  • Epaper
  • More
    • Editor’s Pick
    • Featured
    • Lifestyle
    • Different Strokes
    • Multimedia
    • Sci-Tech
    • Politics
No Result
View All Result
  • Home
  • Top News
  • City News
  • Nation
  • World
  • Business
  • Entertainment
    • Bollywood
    • Hollywood
  • Sports
    • Cricket
    • Hockey
    • Tennis
    • Football
    • Badminton
  • Editorial
  • Opinion
    • Column
    • Diary
    • Letters
  • Epaper
  • More
    • Editor’s Pick
    • Featured
    • Lifestyle
    • Different Strokes
    • Multimedia
    • Sci-Tech
    • Politics
No Result
View All Result
Afternoon Voice
No Result
View All Result
  • Home
  • Top News
  • City News
  • Nation
  • World
  • Business
  • Entertainment
  • Sports
  • Editorial
  • Opinion
  • Epaper
  • More

Home > Business > Economy > Govt steps to boost capital inflow unlikely to reverse Re slide

Govt steps to boost capital inflow unlikely to reverse Re slide

afternoonvoice@gmail.com' by Afternoon Voice
September 24, 2018
in Economy, Featured
A A
0

The five-pronged strategy announced by the government to increase capital inflow into the country is unlikely to reverse the rupee depreciation, Moody’s Investors Service said on Monday.

The Indian government estimates that the measures, including exempting investors from withholding tax for offshore rupee-denominated (masala) bonds and allowing Indian banks to become market-makers, will increase capital inflows by $8-10 billion, or 0.3-0.4 per cent of GDP, in the fiscal year that ends March 31, 2019.

The government also announced its intention to curb imports and reiterated its commitment to this year’s fiscal deficit target.

Although these measures provide credit positive support to India’s external account, they are unlikely to reverse the currency’s depreciation, Moody’s said.

The rupee has depreciated more than 10 per cent against the US dollar since January 2018 and was at Rs 72.1 against the dollar as of September 21.

Moody’s, however, said that strong macroeconomic fundamentals will keep the credit risks of a weaker currency at bay.

The measures will likely take time to affect capital inflows. Moreover, although the potential removal of hedging requirements could reduce some short-term pressure on the rupee, it could also heighten corporates’ exposure to currency fluctuations, Moody’s said.

Concurrently, measures to curb non-essential imports might help to contain the imports bill, but will likely have a lagged effect, it added.

At current levels, India’s current-account deficit (CAD) is still much narrower than the near 5 per cent of GDP posted during the taper tantrum period in 2013, when the currency depreciated by nearly 20 per cent between May and August.

The CAD, difference between inflow and outflow of foreign exchange, widened to 2.4 per cent of GDP in the April-June quarter.

Moreover, India’s External Vulnerability Indicator, the ratio of external debt payments due over the next year to foreign exchange reserves, remains low at 65 per cent when compared with its peers, Moody’s said.

Although foreign reserves have declined by 5.7 per cent to $376.6 billion since peaking in March 2018, they are significantly higher than their level of around $250 billion in 2013, said the US-based rating agency.

The large foreign-currency reserves provide additional policy space and flexibility for the central bank to manage external shocks and reduce the risk of sustained and large portfolio outflows, as well as pressure on the currency, Moody’s said.

It said oil prices at current levels will raise expenditures and add to existing pressures on India’s fiscal position.

Those pressures include the lowering of goods and services tax rates on a range of consumer goods and a tax cut for small businesses, as well as the relatively high minimum support prices set for this year, Moody’s said.

We, therefore, see risks that the central government deficit will be wider than targeted and expect the general government deficit (central and states) to be around 6.3 per cent of GDP in fiscal 2019, compared with 6.5 per cent the previous year, Moody’s said.

The measures announced by the government on September 14 included removal of single-exposure limit of 20 per cent on foreign portfolio investors for corporate bonds, lowering to one year from three years the minimum maturity on manufacturing firms’ external commercial borrowings (ECBs) of up to $50 million.

Tags: GDPIndiaIndian governmentMoodysUSUS Dollar
afternoonvoice@gmail.com'

Afternoon Voice

Recommended For You

Gold, silver, metal
Business

India’s launched its first international bullion exchange for trading

July 29, 2022
Twitter, Elon Musk, Boats
Business

Twitter states it removes 1 million bots each day

July 8, 2022
Economy

Prime Minister Modi said, India’s Bio-economy has grown 8 times in the last 8 years.

June 9, 2022
jay shringarpure, environmentalist, world ocean day
Featured

Be a part of World Ocean Day 2022

June 8, 2022
inflation, Monetary, economy, business, gdp,
Business

Monetary, fiscal authorities taking steps to moderate inflation, push growth: DEA Secy

June 8, 2022
coal mining, finance, monetise, government
Business

Govt to monetise assets worth Rs 75,200 cr in coal mining sector in FY23

June 7, 2022
ADVERTISEMENT

LATEST

Covid- 19

9,062 fresh COVID-19 cases in India

August 17, 2022
Monkeypox. Maharashtra, Mumbai, Pune, monkeypox disease, Monkeypox test

Monkeypox can spread to animals from humans, Offical report

August 17, 2022
Accident

Five family members died due to an accident in Pune as the truck container was driving from the wrong side of the road

August 17, 2022
disease

India has reported new Covid -19 cases of 9

August 17, 2022
TN CM Stalin to meet President Murmu, Vice President Dhankar, and PM Modi in Delhi

TN CM Stalin to meet President Murmu, Vice President Dhankar, and PM Modi in Delhi

August 17, 2022
ADVERTISEMENT
Afternoon Voice

© 2022 Newsmakers Publications Pvt. Ltd. | All rights reserved.

Important Links

  • Disclaimer
  • Privacy Policy
  • About Us
  • Contact Us
  • Support Parallel Media

Follow Us

No Result
View All Result
  • Home
  • Top News
  • City News
  • Nation
  • World
  • Business
  • Entertainment
    • Bollywood
    • Hollywood
  • Sports
    • Cricket
    • Hockey
    • Tennis
    • Football
    • Badminton
  • Editorial
  • Opinion
    • Column
    • Diary
    • Letters
  • Epaper
  • More
    • Editor’s Pick
    • Featured
    • Lifestyle
    • Different Strokes
    • Multimedia
    • Sci-Tech
    • Politics

© 2022 Newsmakers Publications Pvt. Ltd. | All rights reserved.

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In
This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.
Are you sure want to unlock this post?
Unlock left : 0
Are you sure want to cancel subscription?