Helping You Build Wealth With Honest Research
Since 1996. Read On...

MEMBER'S LOGIN

MEMBER'S LOGINX

     
Invalid Username / Password
   
     
   
     
 
Invalid Captcha
   
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Revealed
India's Third Giant Leap

This Could be One of the Biggest Opportunities for Investors




Important: We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
By submitting your email address, you also sign up for Profit Hunter, a daily newsletter from Equitymaster
covering exciting investing ideas and opportunities in India.

AD

India's forex reserves shore up under Rajan's regime
Wed, 28 Jan Pre-Open

On 15th Jan 2015, RBI governor, Raghuram Rajan shocked Dalal Street with a surprise rate cut as he sought comfort in subsiding inflation. His step to not wait for subsequent monetary policy to announce the rate cut was quite uncharacteristic. It reflects the eagerness of RBI to revive growth through monetary policy tools at the earliest. While the rate cut was unanimously welcomed by markets and could be a sign of dovish regime ahead, it seems Dr Rajan also has some other measure up his sleeve that can give a big push to the growth agenda of the Modi government. And the measure is to shore up India's forex reserves.

As per an article in Mint, since the time Dr Rajan took over as RBI's governor he has added US$ 59 bn to India's forex kitty. Currently, India's forex reserves stand at record US$ 322 bn. Increasing forex reserves have numerous advantages. For one, it helps in currency management. If at any time, Rupee depreciates or fluctuates violently, RBI can simply sell dollars to provide necessary support the Rupee. Again, high reserves help in paying import bills. It also provides cushion against external debt payments that are about to be due.

But what are the ways to boost forex reserves?

Exports are main source through which any nation earns valuable foreign exchange. Providing incentives to exporters is one way to build forex reserves. Increasing global demand acts a natural booster as well. And in the case of Dr Rajan the latter factor has played a big role. What further acted as an icing on the cake is PM Modi's charisma as a no-non sense leader. He has instilled faith in the economy which attracted foreign investments into our country further helping fill the reserve kitty.

Over time increasing reserves would give more stability to Rupee and implant greater confidence in foreign investors about the India story. This coupled with PM Modi's reformist approach can certainly help India give the dragon nation a run for its money as far as bagging the crown for the fastest growing nation is concerned.

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

View all commentaries | Archives

Read the latest Market Commentary


Equitymaster requests your view! Post a comment on "India's forex reserves shore up under Rajan's regime". Click here!

  
ABOUT EQUITYMASTER

Since 1996, Equitymaster has been the source for honest and credible opinions on investing in India. With solid research and in-depth analysis Equitymaster is dedicated towards making its readers- smarter, more confident and richer every day. Here's why hundreds of thousands of readers spread across more than 70 countries Trust Equitymaster.

PREMIUM PRODUCTS
QUICK LINKS
POPULAR TOPICS
TRENDING TOPICS
FREE NEWSLETTERS
EQUITYMASTER SUPPORTS
  • HelpYourNGO
  • You Tube
  • Linkedin
  • Twitter
  • Telegram
  • Google Play

Copyright © Equitymaster Research Private Limited (formerly Equitymaster Agora Research Private Limited).

Whitelist | Refer | Terms | Privacy | Contact | About | Sitemap

Phone +91-9136015013

Equitymaster Research Private Limited (formerly Equitymaster Agora Research Private Limited) (Research Analyst)
SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
Telephone: +91-22-61434055. Email: info@equitymaster.com. Website: www.equitymaster.com.
CIN:U74999MH2007PTC175407

Name of the Compliance & Grievance Officer: Ms Sonal Ramachandran
Telephone: +91-22-61434003 | Email: compliance@equitymaster.com

LEGAL DISCLAIMER:
Investment in securities market are subject to market risks. Read all the related documents carefully before investing.
Registration granted by SEBI and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors.

All rights reserved. Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

Equitymaster Research Private Limited (formerly Equitymaster Agora Research Private Limited) (Research Analyst) bearing Registration No. INH000000537 (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA, Canada or the European Union countries, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.