Fed hike may slow India's move to full convertibility

2015 ◽  
Keyword(s):  
Capital Inflows ◽  
Capital Account ◽  
Content Type ◽  
Currency Depreciation ◽  
Left Behind ◽  
Reserve Bank ◽  
Corporate Borrowing ◽  
Capital Account Convertibility ◽  
Account Convertibility ◽  
Reserve Bank Of India

Subject Capital account convertibility. Significance The debate on whether India should render the rupee fully convertible, including on the capital account, has returned following a passing statement recently by Reserve Bank of India (RBI) Governor Raghuram Rajan that India hopes soon to achieve full capital account convertibility. Many factors are encouraging this transition, especially India's comfortable foreign exchange (forex) reserves and large capital inflows. Impacts With China seeking gradually to internationalise the renminbi, Indian authorities may not want to be left behind. Unfettered overseas corporate borrowing has exposed these borrowers to currency depreciation. The IMF is unlikely to advocate removal of all capital controls.

Renminbi internationalisation will push ahead

2016 ◽  
Keyword(s):  
Direct Investment ◽  
Equity Markets ◽  
International Investment ◽  
Capital Account ◽  
Foreign Exchange Reserves ◽  
Content Type ◽  
Capital Account Convertibility ◽  
International Payment ◽  
Account Convertibility ◽  
International Investment Position

Subject Renminbi internationalisation. Significance The renminbi emerged from relative international obscurity to become the fifth most-used currency in international payments in just over a decade. Nevertheless, its international use as a currency of settlement or foreign exchange reserves remains small compared to the dollar and euro. Without full capital account convertibility, the benefits of its international usage have been restricted to exporters and offshore settlement centres, especially Hong Kong. Impacts Reform will raise renminbi quotas for portfolio investors, boost outward direct investment and develop China's international payment system. Incremental reforms will help rebalance China's net international investment position. In the longer term, internationalisation will benefit domestic bond and equity markets by increasing their depth and liquidity.

Achieving capital account convertibility in China1

2011 ◽  
Vol 4 (1) ◽  
pp. 25-42 ◽  
Author(s):  
Yiping Huang ◽  
Xun Wang ◽  
Qin Gou ◽  
Daili Wang
Keyword(s):  
Capital Account ◽  
Capital Account Convertibility ◽  
Account Convertibility

Congress party will likely lead 2019 anti-Modi front

2018 ◽  
Keyword(s):  
Madhya Pradesh ◽  
General Election ◽  
Content Type ◽  
The North ◽  
Congress Party ◽  
Reserve Bank ◽  
Bharatiya Janata Party ◽  
Reserve Bank Of India ◽  
Opposition Parties

Significance Party President Rahul Gandhi’s Congress displaced the Bharatiya Janata Party (BJP) from power in Chhattisgarh, Madhya Pradesh and Rajasthan, all in the nationally ruling party’s ‘Hindu-Hindi’ heartland and with large rural constituencies. In recent months, opposition parties including Congress have been in talks about possibly forming a broad anti-BJP front to challenge Modi in the general election, likely in April or May next year. Impacts More farmer-led protests are likely ahead of the general election. Outbreaks of Hindu-Muslim violence are likely, especially in the north and west. Modi’s government will press the Reserve Bank of India to release more reserves and cut rates, hoping to boost growth.

India’s central bank will be more amenable to Modi

2019 ◽  
Keyword(s):  
Prime Minister ◽  
Fiscal Year ◽  
Gdp Growth ◽  
Content Type ◽  
Reserve Bank ◽  
Bharatiya Janata Party ◽  
Consecutive Term ◽  
Indian Banks ◽  
Bad Debt ◽  
Reserve Bank Of India

Subject RBI under new governorship. Significance Shaktikanta Das was last month appointed Reserve Bank of India (RBI) governor after Urjit Patel resigned. Prime Minister Narendra Modi’s government had for several months clashed with the RBI over how to foster economic growth. The general election is likely in April or May, when Modi’s Bharatiya Janata Party (BJP) faces a tough fight to win a second consecutive term. Impacts In election campaigning, Modi will emphasise India’s mostly robust quarterly GDP growth figures during his term. Indian banks’ level of bad debt could decrease by the end of the fiscal year ending March 2019. India will likely widen its fiscal deficit target for 2018/19 (3.3% of GDP) ahead of the 2019/20 budget.

India’s remedy for bad debt may not bring relief

2017 ◽  
Keyword(s):  
Prime Minister ◽  
Banking System ◽  
Job Creation ◽  
Bank Credit ◽  
Content Type ◽  
Reserve Bank ◽  
Bankruptcy Code ◽  
The Government ◽  
Bad Debt ◽  
Reserve Bank Of India

Subject Implementation of India's new Insolvency and Bankruptcy Code. Significance Shrinking bank credit is hindering India’s ability to finance spending. The Reserve Bank of India (RBI) is relying on the recently instituted Insolvency and Bankruptcy Code (IBC) as the principal instrument to address the problem of stressed assets in the banking system. Impacts The government may accelerate plans to merge stronger and weaker PSBs. Indian corporates may increase their issue of bonds denominated in domestic currency. Prime Minister Narendra Modi will emphasise job creation rather than investment until the next election.

Capital Account Convertibility—Myth and Reality

2012 ◽  
Vol 4 (1) ◽  
pp. 71-86
Author(s):  
T. Satyanarayana Chary ◽  
G. Rathnakar ◽  
Ch. Sunder Shyam
Keyword(s):  
Capital Account ◽  
Capital Account Convertibility ◽  
Account Convertibility

Paradox of Full Capital Account Convertibility in India

Paradigm ◽  
2007 ◽  
Vol 11 (1) ◽  
pp. 28-36
Author(s):  
Hrushikesh Mallick ◽  
Udaya Shankar Mishra
Keyword(s):  
Capital Account ◽  
Capital Account Convertibility ◽  
Account Convertibility

Delhi’s key think tank will urge state intervention

2017 ◽  
Keyword(s):  
Economic Policy ◽  
Interest Rates ◽  
State Intervention ◽  
Think Tank ◽  
Fiscal Stimulus ◽  
Content Type ◽  
Reserve Bank ◽  
Key Policy ◽  
Reserve Bank Of India ◽  
Stimulus Package

Subject Economic policy of the Indian government's key policy think tank. Significance The resignation last month of Arvind Panagariya as vice chairman of the NITI (National Institution for Transforming India) Aayog, and his replacement by Rajiv Kumar, signals a shift in the direction of Prime Minister Narendra Modi’s economic policy. Panagariya is a strong advocate of globalisation and ‘liberal’ economic reform. Kumar has spent most of his career in India and supports a greater role for the state in the economy. Impacts Delhi will soon announce a new fiscal stimulus package. The Reserve Bank of India (RBI) will come under increasing pressure to lower interest rates further. The Swadeshi Jagran Manch lobby group, which promotes the economic ideals of Hindu nationalism, may become more influential.

India’s banks will struggle to inspire confidence

2020 ◽  
Keyword(s):  
Private Sector ◽  
Banking Sector ◽  
The State ◽  
Regulatory Oversight ◽  
Content Type ◽  
Shadow Banks ◽  
Reserve Bank ◽  
High Level ◽  
Bad Debt ◽  
Reserve Bank Of India

Subject Problems in India's banking sector. Significance The Reserve Bank of India (RBI) earlier this month stepped in to rescue imperilled Yes Bank. The private sector lender had accumulated a high level of bad debt. Impacts Indian borrowers will be increasingly distrustful of shadow banks as well as banks. The State Bank of India could come under strain owing to its need to support Yes Bank financially. The RBI will come under growing pressure to improve its regulatory oversight of the banking sector.

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