Building currency buffers in the new world

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If FY23, crude oil prices were to average $120 a barrel, our current account deficit could rise to 3.8 per cent of GDP. Until the quality of our external balance improves, India needs forex buffers

Business Standard

The unexpected Brexit vote has caught a complacent global market completely unawares, and will likely have medium-term implications.The vote will obviously have a direct impact for the UK economy, as it negotiates an unprecedented departure from the European Union (EU), drawn out over the next few quarters and years. But, the impact could spill well beyond the UK. There will be increased speculation on the future of the EU itself, and whether other countries could follow the UK route.Irrespective of how that plays out, this is bad news for global confidence and, therefore, global growth. As it is, there already were lingering doubts about China, commodities and prospects for global growth - this only makes things worse. Global central banks and governments will no doubt be watching markets very carefully, and will attempt to foster confidence with liquidity, intervention, and the use of fiscal spending. But, with much policy ammunition already expended since the global financial crisis

World faces questions totally out of syllabus

This vote will obviously have a direct impact for the UK economy, as it negotiates an unprecedented departure from the EU

Beyond UK borders

In the midst of all this gloom, there are a few positives for rupee, going forward. The first is on the exports front

Positive signals emerging for rupee

The Reserve Bank of India (RBI) heads into it&rsquo;s mid-term quarterly policy review on Monday, against a fairly challenging domestic and global economic backdrop.

Ananth Narayan

Ananth Narayan

Ananth Narayan

Building currency buffers in the new world

World faces questions totally out of syllabus

Beyond UK borders

Positive signals emerging for rupee

50-bp cut in rate needed