The world’s second highest reserve currency after US Dollar, Euro has depreciated nearly 10% in last 4 months from its highest level (1.4487 USD per euro on August 29 which means 1.4487 USD needed to buy one euro) of this year and touched the lowest level of 1.2993 USD per euro on 14th December. The […]Continue Reading... No Comments.
Indian Rupee has depreciated nearly 18% in last 4 months and touched the record low level of 53.50 INR per USD amid the current crisis time which has made Indian Currency as the worst performer among all the emerging economies. The Indian Rupee exchange rate against USD is shown in the below graph. The economists […]Continue Reading... No Comments.
Forex reserves denote all the foreign currency deposits and foreign currency assets held by the central bank of any country. The form of reserves can be any of the followings Foreign currency in cash form Foreign currency assets, which denote all the assets held in different foreign currencies. Gold Special Drawing Rights, which are the […]Continue Reading... No Comments.
Every time we have read the importance of normal Monsoon rains on Indian economy and even the Government is depending on the monsoon rains to achieve the estimated fiscal deficit and GDP growth target every year. Now we will check the reason behind it and try to explain the importance of normal monsoon rain on […]Continue Reading... No Comments.
In this write up we will try to explain the effect of higher fiscal deficit on currency exchange rate and import/export of a country. We will take the example ofIndiawhile explaining the same. High Fiscal deficit increases the government borrowing in the money market as the government borrows more to compensate the gap. Who are […]Continue Reading... No Comments.
Indian government has deregulated the petrol price partially during last year 2010 but it is still not in a position to de-regulate the diesel and kerosene prices even after providing high subsidy for the same. To understand the reason let us look at the advantages and disadvantages to increase the petrol/diesel/kerosene prices hike… Advantages: Reduces […]Continue Reading... No Comments.
China’s Forex reserves touched a record high of USD 3 trillion in May 2011 which is much higher than the second place ofJapan’s USD 1.2 trillion Forex reserves.India’s Forex reserves stands at around USD 300 billion. Chinacontinuously try to boost its trade activity and industrial output to deliver fastest GDP growth in the World continuously.China’s […]Continue Reading... No Comments.
Current account balance specifies the difference between the inflows and outflows of the foreign exchanges and depends on the import and export with the other countries. If import is higher than export, then it is termed as current account deficit and on the contrary it is termed as current account surplus. Countries likeChina,Taiwan,JapanandRussia, having huge […]Continue Reading... No Comments.
As we have already specified that the Central Bank uses its Forex Reserves to stabilize the exchange rate during very volatile currency movement. The exchange rate has to be kept stable within a proper range to help the import and export industry. Let us visit the same with the example ofIndiaand RBI’s role to keep […]Continue Reading... No Comments.