RBI can sell USD 25 bn more to arrest rupee fall: SBI report | WeForNews | Latest News, Blogs RBI can sell USD 25 bn more to arrest rupee fall: SBI report – WeForNews | Latest News, Blogs
Connect with us

Business

RBI can sell USD 25 bn more to arrest rupee fall: SBI report

Published

on

rupee dollar

Mumbai, Sep 18 : The Reserve Bank of India (RBI) should intervene in both spot and forward markets to arrest Indian rupee’s depreciation, suggested a State Bank of India (SBI) Ecowrap report on Tuesday.

As per the report, during the June 2008 to May 2009 period, when rupee depreciated by 13 per cent, the RBI sold dollars worth $43 billion, though the forex reserves at that time stood at $312 billion.

The report cited that even during 1990s, when the total forex reserve was less than $40 billion, the RBI had intervened in the market by selling 8-9 per cent of total reserve to rein in a fall in rupee.

“So, we believe in the present scenario, RBI could go up to its tolerance limit of 10 per cent (a crude proxy of the average ratio over all periods) by selling at least an additional $25 billion in the forex market,” the report said.

The apex bank is known to enter the markets via intermediaries to either sell or buy US dollars to keep the rupee in a stable orbit.

In addition, the report said that oil companies may also be asked to purchase all their USD requirements directly from the RBI through a single bank, an arrangement that was used in 2013.

“Further, oil companies may also be asked to borrow USD for import payments directly from foreign branches of Indian Banks. These funds may be borrowed for longer term instead of the very short-term funds borrowed currently,” the report said.

The report comes on a day when latest global trade protectionist measures, along with high crude oil prices, dragged the Indian rupee to a fresh low of 72.98 per US dollar.

At 5 p.m on Tuesday, the rupee closed at 72.98 per greenback from its previous close of 72.51 per dollar.

It had opened at 72.60 per US dollar at the Inter-Bank Foreign Exchange Market and remained range bound.

However, the Indian currency’s slide commenced from 4.45 p.m onwards as it touched 72.96 breaching its previous intra-day record low of 72.91 made on September 12.

According to analysts, concerns over a rise in inflation rate, growing protectionism in global trade and an outflow of foreign funds from the country’s equity market have had an adverse impact on the Indian currency.

“After comments surfaced that Saudi Arabia is comfortable with higher crude oil prices, Brent prices jumped. At the same time, news came that China has warned of retaliation in trade,” said Anindya Banerjee, Deputy Vice President for Currency and Interest Rates with Kotak Securities.

“Both these news, triggered a sharp decline in Chinese currency and rupee. Weak rupee caused a sell-off in Nifty.”

Business

Vodafone Wins Arbitration Against India In Rs 20K Cr Retrospective Tax Dispute Case

Published

on

vodafone

New Delhi: Vodafone has won the case against India over a retrospective tax demand of more than Rs 20,000 crore.

The Permanent Court of Arbitration at The Hague has ruled that the conduct of India’s tax department is in breach of “fair and equitable” treatment.

Voafone had moved the International Court of Justice (ICJ) in 2016 due to a lack of consensus between the parties’ arbitrators in finalising a judge for the tax dispute.

Following this, a tribunal was constituted in June 2016 after Vodafone challenged India’s use of a 2012 legislation that gave it powers to retrospectively tax deals like Vodafone’s $11 billion acquisition of a 67 per cent stake in Hutchison Whampoa in 2007. The retrospective tax law had been enacted after the Supreme Court judgement went in Vodafone’s favour.

Vodafone had challenged the tax department’s demand of Rs 7,990 crore as capital gains taxes (Rs 22,100 crore after including interest and penalty) under the Netherlands-India Bilateral Investment Treaty (BIT).

Buoyed by the arbitration award, Vodafone Idea stock closed 12 per cent higher at Rs 10.20.

Continue Reading

Business

GST E-Invoicing Mandatory From October

Published

on

By

GST Collection Down

New Delhi: No further relaxation is likely in terms of e-invoicing as the Centre is set to go ahead with the decision to make GST e-invoicing mandatory for companies with annual turnover of over Rs 500 crore for their business-to-business transactions starting October 1.

Industry representatives, however, have urged the government to not make it mandatory and rather allow voluntary compliance.

The relief, however, would be there for relatively smaller businesses, as the threshold for mandatory e-invoicing, a step to improve tax compliance, was earlier planned to be kept at Rs 100 crore, is set to be raised to Rs 500 crore on the recommendations of an empowered panel of the Goods and Services Tax (GST) Council.

The initial date for its roll out was April 1, 2020, but the Centre notified October 1, 2020, as revised date for implementation of e-invoicing.

As per the website of the Good and Service Network ‘e-invoicing’ has many advantages for businesses such as standardisation, interoperability, auto-population of invoice details into GST return and other forms (like e-way bill), reduction in processing costs, reduction in disputes, improvement in payment cycles and thereby improving overall business efficiency.

Continue Reading

Business

Online grocery to become $18bn industry in India by 2024: Report

Published

on

By

Online shopping, sharing data

As companies from Reliance to Amazon put their top dollar in serving daily grocery at your doorstep, a new report said on Friday that online grocery is going to be the next battleground for growth, expanding to over $18 billion by 2024.

According to a joint report by a joint initiative by Bengaluru-based market consulting firm RedSeer and Bigbasket (Brand Intelligence), driven by the significant rise in organic adoption during Covid-19, eGrocery has been on a surge with clocking 1.7 times in gross merchandise value (GMV) in June this year as compared to January.

Online grocery will remain steady for the rest of the year to reach more than $3 billion, the report mentioned.

“The industry has seen more than 70 per cent ARR (annual recurring revenue) jumps in the last quarter across categories. This brings the opportunity to serve a larger set of customers, and some challenges with it,” said Hari Menon, co-founder and CEO of BigBasket.

The report found that demand for comfort foods like noodles and cookies, immunity boosters like lemon and hygiene products like sanitizers picked up after the pandemic while essentials remained strong.

Snacks and branded foods grew by 5 per cent quarterly pre-Covid, however growth jumped to 75 per cent in the June quarter.

Within snacks and branded foods, biscuits and cookies was the largest sub-category and grew the most in Q2.

Beverages grew by 2 per cent quarterly pre-Covid, however growth jumped to 50 per cent in Q2.

“Personal Care grew by 5 per cert quarterly pre-Covid but jumped to 24 per cent in Q2 due to Covid.

“We have observed that traditional brands which pivoted quickly to be digitally ready brands have seen 2x+ jump in sales compared to offline brands. We are excited to have this opportunity to serve the ecosystem,” said Anil Kumar, founder and CEO of consulting firm RedSeer.

Home utilities grew by 6 per cent quarterly pre-Covid but jumped to 11 per cent in Q2.

Within home utilities, detergents and dishwash were the largest sub-category but grew the least in the last quarter.

According to the report, home utilities were not severely affected by the pandemic.

-IANS

Continue Reading
Advertisement

Most Popular

Corona Virus (COVID-19) Live Data

COVID-19 affects different people in different ways. Most infected people will develop mild to moderate illness and recover without hospitalization.