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China moves to curb yuan strength, making it cheaper to bet against the currency
This is the best tl;dr I could make, original reduced by 67%. (I'm a bot)
Over the weekend, the People's Bank of China cut the forex risk reserve ratio for forward contracts - from 20% to zero, according to a central bank statement. Banks used to hold 20% of sales for some currency forward contracts, which essentially lock in the exchange rate for the sale of a currency on a future date. The central bank move appeared to be aimed at stabilizing the Chinese currency, also referred to as the renminbi. Last Friday, the currency rallied around 1.4%. "In the next step, the will continue to maintain the flexibility of the RMB exchange rate and stabilize market expectations, so as to keep the RMB exchange rate basically stable at an adaptive and equilibrium level," said the statement on the PBOC website. While the U.S. Federal Reserve has cut rates and indicated they will stay near zero for years, China's central bank has reversed the bulk of the decline in short-term rates - meaning that Chinese treasury yields are set to be above that of other major markets. That could draw investors to Chinese government bonds, leading to an inflow into the yuan - hence boding well for the exchange rate.
High Foreign Exchange Reserves and its Implications
Foreign exchange reserves are assets in foreign currencies held by the central bank. These may comprise foreign currencies, bonds, treasury bills and other government securities. These assets or reserves play a major role in influencing monetary policies or managing liabilities. The basic purpose of these reserves, however, is to ensure the presence of backup funds in the event of currency devaluation or insolvency. Recently, India had reached an all-time high of $507.64 billion of forex reserves making it the third-largest in Asia. These reserves are also sometimes estimated on how long worth of imports can a country manage- if other financing sources dry up, how long can the country manage on its own. Ideally, six months is considered sufficient, however, the current reserve is sufficient to fund twelve months of imports. However, a crucial difference is that other Asian countries reserves also comprise a significant component of export surplus apart from capital flows. India’s reserves, though, are mostly capital flows with very little or no trade surplus. Many believe that the high Forex reserve is unnecessary and yet the Indian government has held these reserves in liquid without proper utilization of it. The reason being that every foreign currency that enters the market increases the money supply in the economy- meaning that an excessive inflow of foreign currency can cause the problem of excessive liquidity and result in inflation. Moreover, surplus liquidity can hamper monetary policy operations. So it all boils down to a simple question whether such an increase in Forex is a Morale booster which will help us get back in the growth path or is over-reliance on forex reserves problematic? https://preview.redd.it/8zskvs5tnu951.jpg?width=1578&format=pjpg&auto=webp&s=ad83d3e1c6e9ecfe4ba881716512b6dc6c9085aa
Regarding Russia and Saudi Arabia. The break even price isn't the whole story. For Russia and Saudi Arabia the cost of extraction alone is low (~$3-4 ) but the problem is the price needed to balance their budgets and maintain a pegged currency. Saudi Arabia:- Currency pegged at 3.75 Riyal / USD. As exports and other inflows drop, the current account balance turns negative, forex reserves (~$500 billion) have to be spent (USD sold) in order to support this rate.- Oil makes up about 85% of the budget revenue. The budget balances at around $80 per barrel, this means debt has to be issued or sovereign wealth fund/reserve assets sold. (~$600-700 billion) Russia:- Russian rouble is free float, so as exports drop, so do imports as they become too expensive. This is opposite of Saudi Case where export flows decrease but imports remain attractive due to currency peg. Therefore forex reserves do not have to be spent (~$550 billion). - Oil and gas make up about 40% of the budget revenue. The Russian Federal budget is based on 2800 roubles/barrel and the rouble is currently trading at 75 to the dollar, to balance at $30 per barrel the currency would have to depreciate to around 90, there are a few reasons it hasn't done so already (OFZ, other inflows) There is a sovereign wealth fund that can be tapped into as well (~$100 billion). The biggest difference is Saudi Arabia has a lot more spare capacity than Russia. The Saudis could pump out an additional 1-2 million barrels, while Russia can do maybe 0.3-0.5. They can inflict more pain, but not sure if they can weather the storm. All in all, both have little to gain especially in the current economic climate. In the long term I think America will come out as the winner here with a more consolidated, restructured industry.
if less marketable, items that eventually grew to become the staple of Baker adhesive case solution products. While Baker’s father had upon the market some time ago, he'd attracted numerous capable new employees, and the organization was still being an acknowledged leader within the niche markets. The development facilities, though old, were readily adaptable coupled with been well-maintained. Until only a couple of years earlier, Baker Glues tried well financially. While development in sales had not been a powerful point, margins were generally high and purchasers levels steady. The organization had not employed lengthy-term debt but still didn't achieve this. The firm were built with a credit line from the local bank, which in fact had always provided sufficient funds to pay for short-term needs. Baker Glues Situation pdf owed about USD180,000 around the line of credit. Baker had a great relationship using the bank, this was with the organization right from the start. Novo Orders The initial order from Novo was to have an adhesive Novo was using in producing a brand new type of toys because of its Brazilian market. The toys must be waterproof and also the adhesive, therefore, needed very specific qualities. Via a mutual friend, Moreno have been brought to Novo’s purchasing agent. Dealing with Doug Baker, she'd then negotiated the initial order in Feb (the foundation for the prices of this original order is proven in Exhibit 1). Novo had decided to pay shipping costs, so Casementors.com Baker adhesive case solution stand out simply needed to provide the adhesive in 55-gallon drums to some nearby shipping facility. The suggested new order looked like the final one. As before, Novo decided to make payment thirty days after delivery of the glues in the shipping facility. Baker anticipated a fiveweek manufacturing cycle once all of the recycleables were in position. All materials could be guaranteed within two days. Permitting some versatility, Moreno believed payment could be received around three several weeks from order placement which was about how exactly lengthy the initial order required. Because of this, Moreno expected receipt of payment around the new order, presuming it had been decided immediately, around September 5, 2006. Exchange Risks Together with her newly found understanding of exchange-rate risks, Moreno had collected more information on exchange-rate markets prior to the ending up in Doug Baker. A brief history from the dollar-to-real exchange rates are proven in Exhibit 2. In addition, the information for the reason that exhibit provided the newest info on money markets and approximately the expected future (September 5, 2006) place rates from the forecasting service. Moreno had discussed her concerns about exchange-rate changes using the bank when she'd arranged for conversion from the original Novo payment.2 The financial institution, useful of course, had described two ways that Baker could mitigate the exchange risk from the new order: hedge within the forward market or hedge within the money markets. Hedge within the forward market Banks would frequently provide their customers with guaranteed forex rates for future years exchange of currencies (forward rates). These contracts specified to start dating ?, a sum to become exchanged, along with a rate. Any bank fee could be included in the speed. By securing a forward rate for that date of the foreign-currency-denominated income, a strong could eliminate any risk because of currency fluctuations. Within this situation, the anticipated future inflow of reais in the purchase to Novo might be converted for a price that might be known today. Hedge within the money markets Instead of eliminate exchange risk via a contracted future exchange rate, a strong might make any currency exchanges in the known current place rate. To get this done, obviously, the firm required to convert future expected cash flows into current cash flows. It was done around the money market by borrowing “today” inside a forex against an anticipated future inflow or creating a deposit “today” inside a foreign account in order so that you can meet the next output. The quantity to become lent or deposited depends around the rates of interest within the forex just because a firm wouldn't desire to transfer more or under what can be needed. Within this situation, Baker adhesive analysis would borrow in reais from the future inflow from Novo. The quantity the organization would borrow could be a sum so that the Novo receipt would exactly cover both principal and interest around the borrowing. Though Baker Glues were built with a capable accountant, Doug Baker had made the decision to allow Alissa Moreno handle the exchange-rate issues as a result of the Novo order until they better understood the choices and tradeoffs that must be made. After a little discussion and settlement using the bank and bank affiliates, Moreno could secure the next contracts: Baker adhesive case solution ppt bank had agreed to provide a forward agreement for September 5, 2006, in an exchange rate of .4227 USD/BRL. A joint venture partner from the bank, situated in South america and acquainted with Novo, was prepared to provide Baker having a short-term real loan, guaranteed through the Novo receivable, at 26%.3 Moreno was shocked only at that rate, that was greater than three occasions the 8.52% rate on Baker’s domestic credit line however, the financial institution described Brazil’s in the past high inflation and also the recent attempts through the government to manage inflation with high rates of interest. The speed they'd guaranteed was usual for the marketplace at that time. The Meeting It required Doug Baker serious amounts of overcome his disappointment. If worldwide sales were the important thing to the way forward for Baker Glues, however, Baker recognized he'd already learned some important training. He vowed to place individuals training to get affordable use because he and Moreno switched their focus on the brand new Novo order. Observe that the borrowed funds in the bank affiliate would be a 26% apr for any three-month loan (the financial institution would charge exactly 6.5% on the three-month loan, to become compensated once the principal was paid back). The effective rate over three several weeks was, therefore, 6.5%. The 8.52% rate for Baker’s credit line was an apr according to monthly compounding. The effective rate per month was, therefore, 8.52% ÷ 12 = .71%, which means a (1.0071)3 - 1 = 2.1452% effective rate over three several weeks. https://preview.redd.it/f4jmbjov2r921.png?width=1332&format=png&auto=webp&s=55b0c26eaba5030b53970f4cc51465ec30c55bfa
Alright people, here it is, I am now going to try and explain the whole rupee fall phenomenon as simply as I can. We're going to first try and discuss the concepts involved here and then look at what our policy makers have done. Here's hoping that you last till the end cause it was quite a lot of effort. Why am I doing this? I am tired of all the lame rupee fall jokes that flooded my WhatsApp last week. I am tired of all the people telling the government to 'Make it stop!' (Spoiler: It's not that simple). Also, I am going to get out in the job market soon and am too lazy to brush up my basics in a formal way. The prospect of educating fellow redditors makes it worth the effort. Why should you read all of this? Because you care and by the end of this, hopefully, you'll be able to talk about this in a smarter way which will potentially improve your chances with that girl. It is likely that you may already know the answers to some of the questions here. Go right ahead and skip them because I am trying to do an ELI5 here. Let's take it from the top. What is a foreign exchange rate? It is the rate at which one currency will be exchanged with another. Why do foreign exchange rates exist? Simply because the currency of one country will not be accepted in another. We have a lot of countries and we have a lot of currencies and judging by the feeds on facebook, people travel a lot. Fun fact#1: The US dollar and the Euro account for approximately 50 percent of all currency exchange transactions in the world. Adding British pounds, Canadian dollars, Australian dollars, and Japanese yen to the list accounts for over 80 percent of currency exchanges altogether. Who or what decides the exchange rate between two currencies? On a fundamental level, The value of currency, like the price of any other good or service, depends on its demand and supply. And demand for a currency, say, the US dollar, typically comes from Indian importers, people or institutions that invest in the US and travellers to the US. All these agents require dollars for transacting in the US. Analogously, exporters to the US, travellers to India and investor inflows supply US dollars in return for rupees to transact in India. If the demand for the rupee decreases compared to, say, the US dollar, the value of the rupee goes down, and vice-versa So, it's all driven by market (buyers and sellers) forces? No, There are other factors too. But we'll take them up when we're discussing the Indian context. What role does something like RBI do in all this? To understand this, we're going to dive into a little bit of theory. Broadly speaking, there are two ways of handling your currency's exchange rate: A. The Floating Exchange Rate: The market determines a floating exchange rate. In other words, a currency is worth whatever buyers are willing to pay for it. This is determined by supply and demand, which is in turn driven by foreign investment, import/export ratios, inflation, and a host of other economic factors. Generally, countries with mature, stable economic markets will use a floating system. Virtually every major nation uses this system. Floating exchange rates are considered more efficient, because the market will automatically correct the rate to reflect inflation and other economic forces. The floating system isn't perfect, though. If a country's economy suffers from instability, a floating system will discourage investment. Investors could fall victim to wild swings in the exchange rates, as well as disastrous inflation. Did that previous paragraph ring a bell? Interestingly though, we don't follow a floating rate system. Fun fact#2: Canada is the only country whose currency's value is determined absolutely and entirely by the foreign exchange market or as we just learned, by means of a 'floating exchange rate'. Their Central Bank has never intervened in years. B. The Fixed or Pegged Exchange Rate: A pegged, or fixed system, is one in which the exchange rate is set and artificially maintained by the government. The rate will be pegged to some other country's dollar, usually the U.S. dollar. The rate will not fluctuate from day to day. You decree that 1 US Dollar will always be equal to 35 Rupees and that is it. Countries that have potentially unstable economies usually use a pegged system. Developing nations can use this system to prevent out-of control-inflation. And now your thinking: Holy shit! We can do that? Why aren't we doing that? Why don't we get our currency pegged as seen in the Fixed or Pegged Exchange Rate system? For starters, the system can backfire. If the real world market value of the currency is not reflected by the pegged rate, a black market may spring up, where the currency will be traded at its market value, disregarding the government's peg. When people realize that their currency isn't worth as much as the pegged rate indicates, they may rush to exchange their money for other, more stable currencies. This can lead to economic disaster, since the sudden flood of currency in world markets drives the exchange rate very low. So if a country doesn't take good care of their pegged rate, they may find themselves with worthless currency. To further explain, assume that the demand for US dollar increases. Consequently, its value increases, such that each dollar can now buy 10 rupees instead of 4 previously. To offset such an increase, the RBI pumps in sufficient amount of dollars into the market to meet the increased demand. This process ensures that the value of the dollar is restored to its original one. The central bank can supply and draw dollars from forex reserves, which is its official kitty. Well, the problem is, we ain't got much forex reserves. India’s forex reserves, which stand at $270 billion(As of the end of August, 2013) approximately, cannot defend the falling rupee eternally. To make sense out of that figure, let us assume that one bad day, all foreign investors in our country decide to take back their money (which is extremely unlikely). In that dire situation, the RBI would have to borrow to a tune of $215 million to pay them all back. To make matters worse, the increasing oil imports and falling export share in the recent months have contributed significantly towards draining (the already concerning levels of) our forex reserves. The arguments above indicate that the RBI does not have sufficient cushion to strictly adhere to a fixed rate regime. In fact, forex reserves are the only major 'reactionary tool' we have to prevent any speculation based downfall in the value of rupee. So if Forex reserves are so damn important, why haven't we been building them up? Actually, we have been trying to. Refer this graph. If you do a simple forex reserves News based search on Google, you'll find that the last month has seen a lot of ups and downs in it implying that the RBI is scrambling to plug the hole by raising and spending these reserves. But it's still not good enough. But but...that is a good graph, why is it not good enough? Enter Mr. CAD, the media's favourite buzzword At the end of 2007, the Current Account Deficit(Mr. CAD) of India stood at $8 billion. If you refer the above graph, you'll notice that we had a forex reserve of around 300 billion by that time. That means our forex reserves were 37.5 times the CAD. For 2013, the current account deficit is at $90 billion whereas the foreign exchange reserves are down to around $270 billion. That's just around 3 times that of the CAD. That is an alarming fall. What is a Current Account Deficit? Occurs when a country's total imports of goods, services and transfers is greater than the country's total export of goods, services and transfers. This situation makes a country a net debtor to the rest of the world. So, evidently, it has an impact with your foreign exchange rates. A substantial current account deficit is not necessarily a bad thing for certain countries. Developing countries may run a current account deficit in the short term to increase local productivity and exports in the future. Why is our Current Account Deficit so bad? Simply because we get a lot of our stuff from the outside. The most significantly burdensome items that we import are Gold and Oil. The two of them together constitute almost 50% of our total imports! Gold No kidding, we Indians love the yellow metal. We are in fact the largest consumer of Gold in the world. No seriously, our country is single handedly responsible for upto 20% consumption of the worldwide gold consumption. It makes sense to us because not only can we show it off at social events, we can also readily sell it later. In effect, it's like a Saving from the perspective of the mango people. Most Indians are blithely unaware that gold is not locally sourced but actually imported from countries such as Switzerland and the United Arab Emirates. Which is why we had Mr. Chidambaram 'appealing' to us. But nobody's going to listen to your appeals, Sir. My own financial security will always be more important than your CAD-MAD bullshit. Which is why we have steadily increased the import tariffs on Gold imports in an attempt to discourage gold consumption. Not very effective but it's something. Make no mistake though, although it will be 'nice' to have people buy less gold this season, in the long run, it will save yo ass. Fun Fact#3: "I have never bought gold at any point of time in my life. I don’t wear any jewelry — be it a ring or a chain, For me gold is just another metal, it just shines a little bit more.” - P. Chidambaram, Finance Minister of India - A country which is the largest consumer of Gold. Contd as Comment Below Due to Character Restrictions. Continue Reading at 'Oil'
They print it or use tax revenue idiot. That’s how government spending works. There are actually other currencies than bitcoin and USD. Does America’s military budget come from the inflow of Chinese ...
The fun thing about forex trading is that it’s literally like roulette. You don’t even have the element of economic growth adding value to the market, you’re just paying a commission to bet on a coin ...
Nitesh Gupta metworld Trading DMCC causes of Brexit
Britain's beyond differs from that of its eu neighbours. Its position as an unconquered island nation, an extended way of life of parliamentary democracy and an ingrained appropriate sense that in the long run it is able to be searching after itself, represents it out from a few other european nations. It became not that sympathetic to the european best. It joined in 1973, alternatively because there failed to look like any additional preference than enrolling in the subsequent a whole lot greater wealthy Western ecu democracies. it is also true that for years, the British political magnificence as well as press performed an anti ecu sport, wherein made up debts at the horrors of the ecu have been plastered across the front pages of tabloid newspapers. The drip drip effect of 40 years of horrific press insurance become tough to reverse in a 4 month referendum campaign. Britain isn't the simplest european nation in which politicians agree one aspect in Brussels, then pass domestic as well as blame Brussels for the selection. but in Britain the sport become played with an awful lot extra intensity and on a larger scale than in a few different states. a much extra latest distinct British act, that also had a significant element to have amusing inside the referendum impact, become the 2003 judgement of the Blair federal authorities to permit total independence of movement rights to each of the 2004 accession states. Being a outcome, on one January 2004, whole loose movement changed into prolonged via the United Kingdom (as well as ireland) to every of the ten accession states, from eastern and important Europe, the Baltic States, Malta and Cyprus. Their Treaty rights to droop complete unfastened motion of employees for 7 seasons turned into maintained through all the other Western ecu Member States besides Sweden. As the United Kingdom, Sweden and ireland had been the most effective 3 states which supplied entire loose campaign the amount of individuals looking for work within the united kingdom from the Baltic and CEE states surged. obviously, it became a British choice now not to exercise their Treaty rights to constrain free motion. although, in the ecu Referendum plan it wasn't hard for the go away campaigners to pin the surge of personnel into the UK, on the european, in place of the British government. This particular inflow became bolstered through the monetary issues. because the Eurozone failed to provide development across its nineteen participants, in addition to the financial system of debtor nations contracted sharply, a long way more folks arrived from southern eire and Europe. The British financial system speedy righted itself after the troubles, as the UK was in have an effect on of the personal forex of its, and debt and may set up good monetary stabilizers. however, London then really located that because of the Eurozone's dependency to fiscally strict financial guidelines, the United Kingdom changed into additionally performing because the employment shock absorber for Frankfurt. The massive quantity of individuals shifting to the United Kingdom from the CEE states, and additionally from southern Europe appears to had been a big factor in turning the go away vote. it's obvious, in regions of the land, inclusive of London as well as the principle cities, in which there had lengthy been overseas groups, the British had been lots extra calm about immigration and voted greatly to remain in the Union. nonetheless, in areas of the kingdom which had just currently visible a surge of absolutely new remote places employees, they voted significantly to depart. The depart vote likewise surged in additives of the nation wherein there has been very small new or maybe ancient immigration, but where voters feared that immigration may ultimately arrive within the neighbourhoods of theirs. consequently even those exclusively British reasons of the referendum virtually leave vote had been greatly affected by european actions and developments. additionally, there are a diffusion of usual concerns, anger and issues approximately the european Union across the continent and that within the united kingdom reinforced the leave vote. in all likelihood the most important is truely the malfunction of the Eurozone to occasionally reform itself so it's the identical capability as a few other sovereign issuer of currency to pool debt, as well as supply monetary stabilisers and the transfers to perform a unmarried forex region. Or perhaps organise a gentle Euro go out software for the states with whom Germany mainly is not equipped to pool fiscal switch rules and money owed. The' kicking the can' down the road with sovereign and bank account debt, mixed with endless monetary contraction rules imposed by means of Frankfurt in addition to Brussels have tremendously undermined assistance for the Union, and now not only inside the united kingdom Technically of path, one may additionally say that the United Kingdom isn't a fellow member of the Eurozone and therefore of what rely is it to London? nevertheless, as defined above, very adverse monetary regulations in Brussels and Frankfurt, have a direct impact on the UK, flooding Britain with even greater parents searching for paintings. similarly it brings down the really worth of the single industry to the United Kingdom, as Eurozone financial rigidity squeezes monetary development. much extra broadly, the sight of satisfied european state states remaining problem to monetary policies that beaten the financial possibilities of theirs and blighted a technology did not move down properly in London. watching it economically illiterate drama over plenty of the previous decade, and the harmful economic effects of its has appreciably impaired the legitimacy of the entire european undertaking. A full-size portion of the British organisation and intellectual sessions, who were glaringly seasoned-eu, started rethinking the guide of theirs for the Union. This very same exercise of euro de-legitimization of the european is additionally underway across the continent. This ranges from nationalists from the French the front national, to the Italian 5 famous person movement along side German ADF producing increasing political assist at the rear of the Eurozone's problems to an emptying of organization and intellectual assistance for the Union.
CLSA: Greed & Fear : Modi and Banking Amendments [NP]
Chris Wood of CLSA is one of the most revered Equity Strategist. He periodically writes 'GREED & FEAR' series explaining his views and strategies. He usually meets the policymakers, CEOs and sector experts before forming his opinions on each country and the market. This is a txt copy of the latest edition. CLSA: GREED & FEAR : MODI AND BANKING AMENDMENTS - 11th May 2017 GREED & fear’s base case for 2017, namely for global equity investors to be overweight global emerging markets and the Eurozone, has been strengthened by Emmanuel Macron’s victory. Macron’s victory will have further encouraged hopes of a re-energised Franco-German alliance at the heart of the Eurozone and related hopes of a renewed drive towards integration. Whether such hopes prove to be a reality is quite another matter. But for the moment they can propel European equities higher in the run up to the German election where GREED & fear’s base case remains a Merkel victory. GREED & fear also remains constructive on the euro since the base case must be that Derivative Draghi will signal some increase in token tapering at the next ECB monetary policy meeting on 8 June. As for the US, renewed hopes that the Trump administration will be able to pass reform of Obamacare are again encouraging expectations that tax reform can be passed more quickly than previously anticipated. This remains extremely optimistic from GREED & fear’s standpoint, with the major uncertainty whether Republicans in Congress will insist on the package being revenue neutral. But for now such hopes may keep the 10-year Treasury bond yield above 2.3% and therefore equities reasonably constructive. Yet if such hopes of near-term tax cuts are dashed, GREED & fear’s view remains that the yield curve is vulnerable to renewed flattening given that the evidence remains that the downside risk to economic growth in America are rising not falling. More tightening by the Fed, let alone the commencement of balance sheet contraction, increases the risk for US equities and strengthens the case to be long Treasury bonds absent aggressive tax cuts. It also increases the argument to be underweight American equities in a global portfolio. It is a reality of market sentiment that the China reflation trade is currently being questioned. GREED & fear’s base case is that the bulk of the correction in commodities is over, be it in copper, iron ore and other China reflation trade proxies. Still GREED & fear is much less sanguine on oil where hopes of keeping oil above US$50 rest on OPEC being able to agree on an extension of the current production agreement at its forthcoming meeting scheduled for 25 May. In the absence of such a deal, oil looks vulnerable.There is now a following wind in Europe until the German federal election in September where investors currently anticipate a positive result. The issue will then become whether a Eurozone with a Merkel-Macron leadership or, less likely, a Macron-Schulz leadership, will really push for renewed integration on a presumed path to fiscal union. For that is what will be required in GREED & fear’s view to keep Italy in the Eurozone. If Asia and emerging markets remain an overweight forGREED & fear, India also remains the most preferred equity story in the emerging market universe on a ten-year view. This long-term constructive view has been strengthened by evidence that the Modi government is showing a renewed focus to address the asset quality problem in the banking sector. The key development on the bad loan problem was the publication late last week of an ordinance amending the Banking Regulation Act. The key purpose of this amendment is to empower the Reserve Bank of India to intervene in specific cases of default as well as to give the central bank the authority to require specific defaults to be sent to the insolvency court if lenders and borrowers cannot reach resolution.The other aim of this amendment is to remove a concern shared by all bankers that, if they agree to a haircut on a specific loan, they will be at risk of future investigation by the judiciary or an investigative agency. It is the reluctance of the banks to take haircuts which has been the key cause of India’s long festering banking problem.The lack of progress addressing this legacy problem in the banking sector is the main reason why India is still seeing no evidence of a renewed private sector-driven investment cycle. While there have, in GREED & fear’s view, been enormous achievements in other areas of policy, the missing link is the banking sector with the bulk of the problem lying in the state-owned banks.The new approach requires the RBI to execute proactively on its new powers. The good news is that the RBI’s technocratic approach means that its management of the NPA problem will be less politicised than if handled by other government agencies. The word in Delhi is that the RBI will come out with clear guidelines in the near future on how this process will work.There is naturally much scepticism as to whether resolutions of bad debt cases will happen given the previous failure to address the NPA problem. Still, in GREED & fear’s view it is wrong to be too sceptical since, if the RBI is prepared to be tough, it has the leverage to apply, since it now has the power to invoke the insolvency code against defaulters. Once the NPA issue is resolved, the way will be clear for the public sector banks to raise capital, a process which should also lead, with the encouragement of both the RBI and the government, to the consolidation of the public sector banks. The rest of the Indian story under the extraordinary Modi remains as vibrant as ever. While it is true that the Aadhaar programme was launched under the previous government, the real roll out and practical application of the programme has been massively leveraged since Modi assumed power. The benefits of direct electronic payments are hard to exaggerate in terms of reduced leakages and the like. There is also the approaching launch of the Goods and Services Tax (GST). While this will not be as clean as originally hoped, the arrival of GST is a big deal. The fundamental point to focus on is that GST will end inter-state barriers to trade. The result should be increased tax revenues.GREED & fear remains constructive even if the Indian stock market is certainly expensive on a forward earnings basis. The continuing rise in the stock market year to date, and the resulting re-rating, has been triggered primarily by ongoing strong inflows into domestic equity mutual funds.These inflows into the mutual funds have been a feature ever since Modi was elected and reflect a growing preference for financial assets over traditional assets not traditionally visible to the taxman in India, namely property and gold. The investment in Naver in the Asia ex-Japan long-only portfolio will be removed. An investment in Indian state-owned bank State Bank of India will be initiated with a 3% weighting, while a further 1ppt will be added to the existing investment in HDFC.China’s foreign exchange reserves increased by US$20.4bn in April. This marks the first time China’s forex reserves have increased for three consecutive months since June 2014. CLSA’s economics team estimates a mark-to-market gain of US$25bn in April, which implies a balance of payments deficit of only US$5bn in April. This further reinforces the view here that capital flight in China is not out of control.The latest Chinese inflation data provides further evidence that China PPI inflation has already peaked. PPI inflation slowed for the second consecutive month, down from 7.6% YoY in March to 6.4% YoY in April. The slowdown can be partly explained by the base effect. But China PPI also declined on a month on month basis for the first time since June 2016.
In this transaction, it is the inflow of the foreign exchange in India . please obtain the FIRC ( Foreign Inward remittance certificate ) from the Indian Bank , and it will be treated as the inflow of the foreign exchange . The BRC issued by the bank will be very useful The director report should contain the detail of the invoice done ( FOB value of the exports of services ) , payment received ... The Forex market is useful because it helps enable trade and transactions between countries, ... Forex market typically look carefully at a country's economic and political situation, as these factors can influence forex inflow meaning direction of its currency. One of the unique aspects of the Forex market is that the volume of trading is so highpartially because the units exchanged are so ... FOREX.com is a trading name of GAIN Capital UK Limited. GAIN Capital UK Ltd is a company incorporated in England and Wales with UK Companies House number 1761813 and with its registered office at Devon House, 58 St Katharine’s Way, London, E1W 1JP. GAIN Capital UK Ltd is authorised and regulated by the Financial Conduct Authority in the UK, with FCA Register Number 113942. GAIN Capital UK ... Forex (FX) is the market where currencies are traded and the term is the shortened form of foreign exchange. Forex is the largest financial marketplace in the world. With no central location, it ... Meaning / Definition of Cash Inflow. Categories: Accounting, Funds received by a company due to sales, financing, or investments. cash inflows are used to gauge the overall financial health of a business, and a company with a large and stable cash inflow can be considered to be in a good financial position. Meaning / Definition of Net Savings Inflow. Categories: Finance, The change during a given period of an institution's total savings account liability, determined by adding all deposits and subtracting all withdrawals. Also referred to as net savings gain or net savings receipts. When interest credited to accounts during the period is excluded, the resulting total is referred to as net new savings. inflow - noun the act of coming in or being brought in "...the dollar is strong because of capital inflows rather than weak because of the trade deficit" [ ...
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