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Nikhil Kamath

Oct 22 • 3 tweets • 2 min read

In #India, #imports continue to rise faster than #exports, and the foreign exchange reserves have dropped from around $641 billion to $532 billion in the last 12 months.

A country accumulates foreign exchange reserves when its revenue generated from exports is greater than the expenditure incurred from imports. Crude, other mineral fuels and waxes constitute 27% of our total imports.

@Investywise

And China is our biggest import destination, whereas the USA is the country we export the most.

Can India turn the trend of falling #reserves?

Research : @Investywise

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Nikhil Kamath

@nikhilkamathcio

Jun 15

1. Fed increases the federal funds rate by 75 bips to 1.6 percent, this is the rate at which banks and credit unions lend overnight without collateral to other institutions.
Set to reach 4 percent by the end of the year.

2. T bills/bonds are the rate at which the US govt borrows to fund expenditure, this is at 3.45 percent.(10y)

Home Mortgage rates are now at 6 percent in the US, which shud lower demand for housing.

Similarly higher rates discourage Capex and borrowing, in theory this should slow down the economy and curtail inflation.

At 1.6 % while inflation has averaged 7 % for the first half of the year, inflation would need to fall to 3 % abruptly to get it to the short term 5 % tgt.

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