Decoded: How the #Rupee trade settlement is tied to India’s trade deficit and forex reserves

businessinsider.in/finance/news/w…

By @jainrounak
India is a trade deficit country, meaning it imports more than it exports — this forces the country to maintain large forex reserves. The ongoing pressure on the #Rupee and its decline against #dollar pushed #RBI to put in place a mechanism to allow international trade in rupees.
Since India is a net importer – with its imports exceeding exports by over $87 billion in 2021-22 – and the value of Indian #Rupee declining consistently, #RBI’s latest decision to allow international trade in rupees is expected to reduce the pressure on India’s forex reserves.
#RBI’s move would reduce the outflow of US dollars and shore up demand for the #Rupee This would allow the central bank leeway to conserve its forex reserves and keep rupee stable. The US #Dollar has been going through a phase of strength against most currencies in the world.
The US #dollar’s strong performance has essentially made imports expensive for most countries. #SriLanka, which is going through one of its worst economic crises, is a glaring example of a country in which the economy has come to a halt due to a drastic fall in forex reserves.
The question that #RBI needs to answer is – why would countries with a trade surplus with India want to trade in rupees?

For instance, #China had a $73 billion trade surplus with India in 2021-22, that is, Indian imports from China exceeded its exports to China by $73 billion.
For now, though, it looks like trade settlements in rupee will be limited to countries like Russia and Iran, which are facing sanctions from the West, and #SriLanka, which is going through an economic turmoil, and a few other immediate neighbours of India.

#Rupee #RupeeVsDollar

• • •

Missing some Tweet in this thread? You can try to force a refresh
 

Keep Current with Business Insider India🇮🇳

Business Insider India🇮🇳 Profile picture

Stay in touch and get notified when new unrolls are available from this author!

Read all threads

This Thread may be Removed Anytime!

PDF

Twitter may remove this content at anytime! Save it as PDF for later use!

Try unrolling a thread yourself!

how to unroll video
  1. Follow @ThreadReaderApp to mention us!

  2. From a Twitter thread mention us with a keyword "unroll"
@threadreaderapp unroll

Practice here first or read more on our help page!

More from @BiIndia

Jul 14
Gauri Khan says #Bollywood glamour becomes a baggage for business #women like her

@gaurikhan @bonitodesigns

businessinsider.in/business/news/…

By @Bhaktimakwana18
Starting a business is never easy, more so for women. It is hard to find validation and convince people that you mean business.

Movie producer turned interior designer #GauriKhan, who ventured into creating luxurious spaces has not had it easy with her brand Gauri Khan Designs.
In conversation with @BiIndia, #GauriKhan says it is difficult for people to have real faith in you. “There will be a lot of people especially in my field, when they will have faith in you it is because you are married to so & so but on the other hand it's a drawback.” said Khan.
Read 6 tweets
Jul 13
Indian #tech firms contributed nearly $200 billion to the US #economy, more than the combined economies of 20 US states

businessinsider.in/tech/enterpris…

By @Krittiiii
Indian #tech firms have spent $396 billion in US sales output. This supported 1.6 million jobs in total and contributed $198 billion to the US #economy, which is larger than the combined economies of 20 US states in 2021, according to a NASSCOM report.
The sector directly generated $103 billion of revenue in the USA, while employing 207,000 people last year. The Indian tech industry created an average wage of $106,360 for the #employees in the US, according to the report.
Read 6 tweets
Jul 13
Explained: International trade settlement in #Rupees and why #RBI is doing it

businessinsider.in/finance/news/w…

By @jainrounak
#RBI’s efforts to keep the #Rupee stable and cut down the use of the US Dollar – a decades-old habit that most of the world seems unable to shake off – has seen an earnest beginning with the central bank now allowing invoicing of international trade in Rupees.

#RupeeVsDollar
What is international trade settlement in #Rupees?

When countries import and export goods and services, they have to make payments in a foreign currency. Since the US Dollar is the world’s reserve currency, most of these transactions are entered into US dollars.

#RupeeVsDollar
Read 8 tweets
Jul 13
#COVID19 cases rise in India – #WHO warns pandemic ‘nowhere near over’

businessinsider.in/india/news/cov…

By @VaamanaaSethi
The daily #COVID19 tally in India jumped by 24% in the last 24 hours with over 16,900 new cases being reported on July 13 even as #WHO warned that the pandemic was ‘nowhere near over’.

Active cases has surpassed the one lakh mark, comprising 0.3% of the total infections.
Over 45 deaths due to #COVID19 have also been recorded, taking the total tally to 5,25,519. Odisha reported its first Covid death in two months yesterday.

Most of the deaths were recorded in Kerala, which saw 17 deaths, while #Maharashtra & #WestBengal accounted for 13 deaths.
Read 6 tweets
Jul 12
From a small thela to 100 stores — #MBAChaiWala is now looking to hire 500 people for 100 more

@Prafull_mbachai

businessinsider.in/careers/news/m…

By @Krittiiii Image
Prafull Billore (@Prafull_mbachai) led tea cafe chain MBA Chai Wala is all set to mark its territory in 200 Indian cities by the end of this year, generating over a 1,000 #jobs.

#MBAChaiwalaInd Image
Billore — a son of a farmer — founded MBA Chai Wala as ‘Mr Billore Ahmedabad’ in 2017 after failing to crack #CAT. He wanted to do MBA and work at a multinational corporation, but instead he opened a small ‘thela’ cart outside his dream college IIM Ahmedabad.

#MBAChaiwalaInd Image
Read 7 tweets
Jun 30
#GST rates raised again, take out your cheque books. Wait, that’s taxed too

businessinsider.in/finance/news/g…

By @Bhaktimakwana18
Packaged and branded food items (except frozen) like meat, fish, crud, paneer, honey, dried leguminous vegetables, dried makhana, wheat and other cereals, wheat or meslin flour, jaggery, puffed rice (muri) have been brought under #tax slab under the five percent slab.

#GST
Hotel rooms under ₹1,000 per day, which were not taxed earlier will now attract a 12 percent #tax. Non-ICU hospital rooms under ₹5,000 per day, that were exempted from #GST will now be charged with a five percent tax.
Read 6 tweets

Did Thread Reader help you today?

Support us! We are indie developers!


This site is made by just two indie developers on a laptop doing marketing, support and development! Read more about the story.

Become a Premium Member ($3/month or $30/year) and get exclusive features!

Become Premium

Don't want to be a Premium member but still want to support us?

Make a small donation by buying us coffee ($5) or help with server cost ($10)

Donate via Paypal

Or Donate anonymously using crypto!

Ethereum

0xfe58350B80634f60Fa6Dc149a72b4DFbc17D341E copy

Bitcoin

3ATGMxNzCUFzxpMCHL5sWSt4DVtS8UqXpi copy

Thank you for your support!

Follow Us on Twitter!

:(