Indian Economy: News and Discussion

afako

Hindufying India
Senior Member
Joined
Aug 18, 2010
Messages
3,370
Likes
17,478
Country flag
Can any Mullahnomist confirm?

1 year back 1$ = 0.72£
Today 1$ = 0.92£

So pound has lost value by 27% in one year.

Last year it was reported that UK economy in $ was 3.5 trillion, does that mean UK economy in $ term today is 2.55 trillion assuming there is no growth?

Does that also mean that in per capita GDP rankings they have fallen many places?
 

Lonewolf

Psychopathic Neighbour
Senior Member
Joined
Jan 26, 2021
Messages
7,083
Likes
26,822
Country flag

Hari Sud

Senior Member
Joined
Mar 31, 2012
Messages
2,741
Likes
5,425
Country flag
Can any Mullahnomist confirm?

1 year back 1$ = 0.72£
Today 1$ = 0.92£

So pound has lost value by 27% in one year.

Last year it was reported that UK economy in $ was 3.5 trillion, does that mean UK economy in $ term today is 2.55 trillion assuming there is no growth?

Does that also mean that in per capita GDP rankings they have fallen many places?
BS
 

another_armchair

Senior Member
Joined
Feb 28, 2019
Messages
6,893
Likes
34,273
Country flag
Can any Mullahnomist confirm?

1 year back 1$ = 0.72£
Today 1$ = 0.92£

So pound has lost value by 27% in one year.

Last year it was reported that UK economy in $ was 3.5 trillion, does that mean UK economy in $ term today is 2.55 trillion assuming there is no growth?

Does that also mean that in per capita GDP rankings they have fallen many places?
They are a lot worse off than those numbers suggest.

BoE has a gargantuan task reining in inflation, paring debt and kicking freeloaders to be productive and stop inflating their welfare rolls.

Gora sahib may finally wake up from his slumber on rampant illegal migration by peacefuls and afros.

Lets see if it is too little too late.
 

Rex72920

Regular Member
Joined
Sep 21, 2022
Messages
46
Likes
303
Country flag
Can any Mullahnomist confirm?

1 year back 1$ = 0.72£
Today 1$ = 0.92£

So pound has lost value by 27% in one year.

Last year it was reported that UK economy in $ was 3.5 trillion, does that mean UK economy in $ term today is 2.55 trillion assuming there is no growth?

Does that also mean that in per capita GDP rankings they have fallen many places?
Saw this on twitter. Just this year data though.
 

FalconSlayers

धर्मो रक्षति रक्षितः
Senior Member
Joined
Oct 14, 2020
Messages
20,773
Likes
124,548
Country flag
Can any Mullahnomist confirm?

1 year back 1$ = 0.72£
Today 1$ = 0.92£

So pound has lost value by 27% in one year.

Last year it was reported that UK economy in $ was 3.5 trillion, does that mean UK economy in $ term today is 2.55 trillion assuming there is no growth?

Does that also mean that in per capita GDP rankings they have fallen many places?
UK’s GDP last year in 2021 was £2.2 Trillion and if it grows 10% considering 10+% inflation and an ongoing recession, it will be around $2.6 trillion, almost a trillion dollars behind India this year.
1664039325542.png
 

jai jaganath

Senior Member
Joined
Jul 3, 2022
Messages
1,234
Likes
2,252
Country flag
Do we just cut the corner?

iTIians staying home instead of opting for firangistan.

Nah bhaya
I think situation in the market is not favorable for foreign companies to hire or import workforce from India to abroad due to current geopolitical trend
It's just a normal change in trend that's it
It will rebound again in a year as we never change
I heard it from my relative so counter questions can't be answered properly as I lack knowledge
 

afako

Hindufying India
Senior Member
Joined
Aug 18, 2010
Messages
3,370
Likes
17,478
Country flag
UK’s GDP last year in 2021 was £2.2 Trillion and if it grows 10% considering 10+% inflation and an ongoing recession, it will be around $2.6 trillion, almost a trillion dollars behind India this year.
View attachment 173087
Am I conceptually right?

I recall Indian GDP growing at 4% and with inflation 9% in UPA days but rupee depreciation resulted in Indian GDP being in certain band near $2 trillion for many years.
 

xaxax

New Member
Joined
Sep 24, 2022
Messages
7
Likes
42
Am I conceptually right?

I recall Indian GDP growing at 4% and with inflation 9% in UPA days but rupee depreciation resulted in Indian GDP being in certain band near $2 trillion for many years.

Nominal GDP is decided by nominal growth: real growth + inflation. It's also affected by FX movements since the common currency is the US dollar. So if India grows by, say, 20% this year nominally but the rupee depreciates by 10% then its total nominal growth will be 10%.

The RBI has been burning precious FX reserves (almost $100 billion over the past 6 months) to keep the currency elevated. The recent jump in the rupee-dollar exchange rate suggests that they stopped their costly intervention.

India's current account deficit will hit >6% in the current quarter. Such a large negative balance cannot be maintained without either two things happening: A) energy prices go down or B) continued rupee depreciation.

Since energy prices are a function of the RU-UA war, I don't think they will come down any time soon since that war looks to be dragging on for a long time. So the only other option is depreciation.
 

Rex72920

Regular Member
Joined
Sep 21, 2022
Messages
46
Likes
303
Country flag
Nominal GDP is decided by nominal growth: real growth + inflation. It's also affected by FX movements since the common currency is the US dollar. So if India grows by, say, 20% this year nominally but the rupee depreciates by 10% then its total nominal growth will be 10%.

The RBI has been burning precious FX reserves (almost $100 billion over the past 6 months) to keep the currency elevated. The recent jump in the rupee-dollar exchange rate suggests that they stopped their costly intervention.

India's current account deficit will hit >6% in the current quarter. Such a large negative balance cannot be maintained without either two things happening: A) energy prices go down or B) continued rupee depreciation.

Since energy prices are a function of the RU-UA war, I don't think they will come down any time soon since that war looks to be dragging on for a long time. So the only other option is depreciation.
Actually the crude oil prices have fallen below the Pre-Russia Ukraine war level. And that's the case since the onset of September.

IMG_20220925_010054.jpg


India buys Russian oil at a discounted rate over the market price. So it must be a bit cheaper for us. Though it's only a fraction of our total imports, at around 24%.
 
Last edited:

xaxax

New Member
Joined
Sep 24, 2022
Messages
7
Likes
42
Actually the crude oil prices have fallen below the Pre-Russia Ukraine war level.
Yes, but India imports more than just oil.
Commodity prices are still elevated. Here's coal prices:





There's also another factor at play. EU/US are entering recession and China is teetering on the brink. In this world, India is growing strong so it is soaking up excess demand from other countries, leading to elevated imports. That is putting pressure on the rupee.
 
Last edited:

Rex72920

Regular Member
Joined
Sep 21, 2022
Messages
46
Likes
303
Country flag
Yes, but India imports more than just oil.
Commodity prices are still elevated. Here's coal prices:

There's also another factor at play. EU/US are entering recession and China is teetering on the brink. In this world, India is growing strong so it is soaking up excess demand from other countries, leading to elevated imports. That is putting pressure on the rupee.
The recent depreciation of Rupee wtr to Dollar coincides with the rate hikes by Federal Reserve. Not because RBI suddenly decided to not interviene anymore.

Quantitatively India's crude oil imports far exceed all other commodity imports. So a fall in crude oil prices will have a big positive impact on reducing our CAD.
IMG_20220925_111136.jpg


The recent hike in coal imports is because of the depreciation of coal stocks in Thermal power plants due to reduced mining actives in India owing to covid lockdown.

Steps are already been taken to tackle the abnormal rise of imports in this sector.
So it will also have a positive impact on our CAD in comming months.

Electronics is showing massive growth in exports (55% yoy) & the deficit will shrink over time.

And sectors like Engineering goods & Chemicals are pretty much balanced with chemicals showing marginal deficit due to higher import prices. That can be mitigated easily.
IMG_20220925_111100.jpg


In Conclusion I don't see the CAD widening any further. The worst in behind us.
 
Last edited:

xaxax

New Member
Joined
Sep 24, 2022
Messages
7
Likes
42
The recent depreciation of Rupee wtr to Dollar coincides with the rate hikes by Federal Reserve. Not because RBI suddenly decided to not intervention anymore.
Well, the RBI has been spending 2-5 billion USD per week to prop up the rupee artificially.



So you're factually wrong to think that intervention (or lack thereof) has nothing to do with the rupee level.

The RBI wasted 100 billion propping up the rupee.




Clearly that is not sustainable.

That said, the REER has barely budged in India for many years and is arguably overvalued.



The rupee needs to fall a lot more and it will.


In Conclusion I don't see the CAD widening any further. The worst in behind us.
Well, the CAD will reach >5% of GDP this quarter, so it is hard to go much below from here.

 

Rex72920

Regular Member
Joined
Sep 21, 2022
Messages
46
Likes
303
Country flag
Well, the RBI has been spending 2-5 billion USD per week to prop up the rupee artificially.



So you're factually wrong to think that intervention (or lack thereof) has nothing to do with the rupee level.

The RBI wasted 100 billion propping up the rupee.




Clearly that is not sustainable.

That said, the REER has barely budged in India for many years and is arguably overvalued.



The rupee needs to fall a lot more and it will.




Well, the CAD will reach >5% of GDP this quarter, so it is hard to go much below from here.

RBI stopped it's intervention & let the Rupee slide from 79 to 81 because of the rate hike by the Federal Reserve by 75 percentage points, in September 20-21. That exactly coincides with the depreciation of Rupee.

IMG_20220925_120316.jpg


It would have caused further fall of our forex reserves to hold Rupee at that rate. In case there was no rate hike we wouldn't have seen such a sharp fall in Rupee valuation.

Your analysis is quite dubious in the sense RBIs response is actually a reaction not the main cause.

I am confident that we will hold Rupee at around 82 (if there is no further rate hike).

PEA Sanjay Sanyal has said that the American covid relief program has created excess liquidly in the market & that we don't think we wanna hold no to huge Dollar reserves because of the excess liquidly.

The fall in forex reserves is quiet anticipated. And with healthy FDI & relatively good export rate we are quite safe in this regard as of now.
 
Last edited:

ezsasa

Designated Cynic
Mod
Joined
Jul 12, 2014
Messages
27,045
Likes
120,431
Country flag
Well, the RBI has been spending 2-5 billion USD per week to prop up the rupee artificially.



So you're factually wrong to think that intervention (or lack thereof) has nothing to do with the rupee level.

The RBI wasted 100 billion propping up the rupee.




Clearly that is not sustainable.

That said, the REER has barely budged in India for many years and is arguably overvalued.



The rupee needs to fall a lot more and it will.




Well, the CAD will reach >5% of GDP this quarter, so it is hard to go much below from here.


USD is a global commodity, it's price depends on traditional supply demand logics.

if USD moves back to U.S due to rise in interest rates at home, RBI will intervene to retain some USD within the country. if left unchecked, it will lead to even worse outcomes, our traders need USD to pay for their imports, they will keep bidding more ₹ to buy the same $ since they need to keep their business running.

is it wrong for RBI to protect the interests of Indian businessmen?
how trustworthy are economists whose world view is shaped by taxi drivers across the world?
 

Haldilal

लड़ते लड़ते जीना है, लड़ते लड़ते मरना है
Senior Member
Joined
Aug 10, 2020
Messages
24,969
Likes
90,126
Country flag
Ya'll Nibbiars The Maharashtra Land Acquisition Has Started in Sangli district for Pune Kolhapur Expressway.

FdBOOJuaUAAZGI3.jpeg
 

Haldilal

लड़ते लड़ते जीना है, लड़ते लड़ते मरना है
Senior Member
Joined
Aug 10, 2020
Messages
24,969
Likes
90,126
Country flag
Ya'll Nibbiars The JSW Energy Plans for Power Plant. The Investment : 4,500 Crore rupees Capacity : 450 MWs. And the Employment:450 Peoples.
 
Last edited:

Latest Replies

Global Defence

New threads

Articles

Top