Moreover, there are many market-based reasons for the yuan to weaken in light of Trump's tariffs. China's economic growth is slowing, and its exports are hurting. Market forces would tend to weaken the yuan as the demand for China's exports has weakened and as China's credit market conditions have eased given the lull in China's growth. From a policy point of view, China's macroeconomic authorities should welcome the decline in the yuan, as the declining exports to the United States will be partly offset by greater competitiveness in other markets. Such a partial offset is not nefarious — it simply helps cushion a harsh blow from the United States. … [Read more...] about China isn’t the economic manipulator in this trade war. Trump is
Deficit trade us
By Sunil Alagh Prime Minister Narendra Modi has been exemplary in handling the Covid-19 situation through the lockdown, and then giving the economy a much needed boost through the economic stimulus. The priorities were clear — revival, and then sustainable growth. First save lives and look after the poor, the migrants workers and farmers. Then MSMEs and industry, and finally provide long-awaited reforms. Also, the regulatory rules should facilitate, not hinder, the process. Finance minister Nirmala Sitharaman has addressed most of these issues. But the measures are skewed towards supply side, and not enough has been done to create demand. Here are some suggestions GoI should consider. First, in the media, GoI seems to be addressing economists rather than the general public. It should have been more transparent and simple in its communication. Very few of us comprehend the figures that run into thousands of crores. It should have been brought down to understandable terms. Over … [Read more...] about View: Keep it simple & work the plan
By Duncan Bartlett People experiencing a life in lockdown often report that certain relatives and friends feel closer than before. However, they also say that some of their associates seem more distant than ever, even if they are actually near neighbours. Similarly, the dramatic changes caused by coronavirus have shaken up relationships between Asian nations. India recently marked 70 years of diplomatic relations with Beijing but there is a disturbing backlash against China on social media. Many posts seethe with anger relating to the origin of the Covid-19 virus in Wuhan and alleged attempts to cover it up. Some of this resentment is stoked by the hawks in the United States, who suggest the pandemic is China’s deliberate and malevolent attack upon the world. China bristles in defence against such allegations. State media presents the situation as a terrible but unavoidable natural disaster. It talks of the People’s War against the virus and praises the bravery of its … [Read more...] about View: Can India benefit from the world’s frustration with China?
MUMBAI: The country's economy, which is likely to contract by 5 per cent in the current fiscal, may expand by around 5 per cent in the next financial year, former RBI governor Duvvuri Subbarao said. Rating agency Crisil on Tuesday had said the Indian economy may shrink by 5 per cent in fiscal 2021, adding this recession could be the country's fourth since Independence and perhaps the worst to date. "I do believe that getting up to 5 per cent next year (FY22) is quite probable. The reason I say that is because this (COVID-19) is not a natural disaster. Our factories are still standing, our infrastructure and transport systems are still there," Subbarao said. He was speaking at a webinar on 'Indian Economy - Navigating through a Crisis', organised by the Centre for Financial Studies (CFS) at Bhavan's SPJIMR business school. "Once the lockdown is lifted and the economy is given a green signal to restart, I am sure that we can ramp up pretty soon and reach at least 5 per cent (growth … [Read more...] about India’s GDP growth may rebound to 5 pc in FY22, says Duvvuri Subbarao
MUMBAI/NEW DELHI: India may need to inject up to 1.5 trillion rupees ($19.81 billion) into its state-owned lenders as their pile of soured assets is expected to double during the coronavirus pandemic, three government and banking sources told. The government initially considered a budget of around 250 billion rupees for bank recapitalisations but that has risen significantly, a senior government source with direct knowledge of the matter said, with loan defaults likely to rise as businesses take a severe hit from nationwide lockdowns to tackle the coronavirus. "The situation is very grim," the source said, adding that banks would require fresh funds soon. All the sources asked not to be identified as the discussions are private. Finance ministry did not respond to a request for comment during working hours on Wednesday. The capital plans were still being discussed and a final decision could be taken in the second half of the fiscal year, a second government source said. India's … [Read more...] about India may need to pump $20 billion into coronavirus-hit state banks: Sources