AGENDA
TEAM PROBLEM INTRODUCTION DESCRIPTION INR VALUE DETERMINATION AFFECTS ON INDIAN BUSINESS
BALANCE OF TRADE ISSUE OIL IMPORTS GOLD IMPORTS
LACK OF CAPITAL INFLOWS ROLE OF RBI AND GOVERNMENT
TEAM
Team
• Ankit Ahuja ankit.ahuja15@sibmpune.edu.in
• Ankit Kawad
• Angshuman • Akumtoshi
ankit.kawad15@sibmpune.edu.in angshuman.kar15@sibmpune.edu.in akumtoshi.poengar@sibmpune.edu.in
PROBLEM INTRODUCTION
DESCRIPTION, INR VALUE DETERMINAT ION AND EFFECTS ON BUSINESS
The Weakening Rupee
•2nd worst performer in currency market among developing countries. Lost 9.25% since May 2013 •Indonesia(RUPAIYA)and South Africa(RAND) depreciated by 7% and 10 % resp. They compete with India in Agri-products, Engg. goods, electronics and chemicals
• Similarly Bangladesh(TACCA) depreciated by 5%, which competes in garment industry.
•Thailand(BAHT) that competes in gems and jewellery, there currency have depreciated by 7% .
INR value determination
Affects of Weakening Rupee on Businesses
Positives
• • • • • •
Mixed
Negative
Companies having foreign debt will be impacted severely as compared to export oriented companies
BALANCE OF TRADE PROBLEM
O IL IMPORTS ISSUE
Balance of Trade – Imports vs Exports
Oil Imports
BALANCE OF TRADE PROBLEM
GO LD IMPORTS AND LACK O F CAPITAL INFLOWS
Gold Imports
•950 Tons of estimated imports this year
•Villainous figure in CAB
• 10% of Import bill , 75% of Imports as Jewelry
•33% of World’s demand
•Need for innovative financial instruments that can provide real returns
Lack of Capital Inflows
•$3.3 billion of Government & Corporate Bonds Bought vs$6.86b last year
REGULATOR & ADMINISTRATOR
RO LE OF RBI AND GOVERNM ENT
Role of RBI
Authorized Body, Forex Licenses Investments by Foreigners & Foreign Travel EXIM Trade
RBI is the apex bank that intervenes, supervises, controls the foreign