People are asking WHY DID #INR to fall so sharply on FRIDAY to 83.64/USD?
A quick 🧵 explaining why …#RBI
Who BENEFITS most when INR Depreciates?
✅It’s Financial Year end and @RBI has PROFIT targets & DIVIDEND targets of 120,000 Crores to pay Govt of India
✅ when INR Depreciates (#USDINR Rises), @RBI makes profits since it’s ASSETS are USD BONDS/GOLD & it’s LIABILITIES is INR
✅ When #INR depreciates (#USDINR rises), EXPORTS become competitive and IMPORTS become cheaper
✅ When #INR Depreciates, The BIGGEST component of GST (IGST of GST) grows faster since IGST is levied on IMPORTS, Basic & Intermediate Raw Materials, Inventory
#NRI #Remittances will not only #COLLAPSE but they could reverse
A quick thread with implications for the #INR
#NRI #Remittances will not only collapse but they could reverse as outflows unless the DEPOSIT Rates offered by Indian Banks to NRIs are at-least 6-7% $ Rates
Today the US Rates are 1) 4.7% on the US 10yr 2) Investment Grade US bonds offer $6.5% 3) MBS Securities offer $7% at-least 4) US High Yield Bonds are offering $8-9% pa
Compared to that FCNR deposits are at just 5.5-5.8%
FIRST: Every litre of Ethanol, Govt India will lose Rs15-20 in Tax Collections since:
👉Cost of Procuring PETROL is Rs45/lt
👉Cost of Procurement of ETHANOL is Rs65/Lt
#UncommonSense
UK/US NRIs & Top 2% Indian Residents (30 Mn Income Earners > Rs6lac/per yr) praise #Medical#Facilities in India especially ability to Approach Specialists Directly
Driving though PUNE/MUM/BLR & reaching Hospital in time in a Medical Emergency is Impossible
These people generally forget that when they compare themselves to the US/UK NRIs vs the Indians in India… one is comparing the Avg US/UK citizen with the Top 2% in India
Let me explain
(1) For Indian hospitals in Major Metros in India average revenue per occupied bed (ARPOB) is Rs65k > 50% Annual Revenue for 60% of Indian population