There is some respite expected for India in terms of prices of imported commodities. This may ease the depletion of its foreign exchange reserves. The country has faced a widening of its merchandise trade deficit from US$ -17.91 billion to US$ -26.91 billion between October 2021 and October 2022. The commodity price data provided by the World Bank in December 2022 (termed as The Pink Sheet) shows that energy prices plummeted by...
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Vicious cycle -Prabhat Patnaik
-The Telegraph A system without any steering control An essential characteristic of modern capitalism is that the living conditions of millions of people are determined by the whims and caprices of a handful of financial speculators; indeed, that is what ‘leaving things to the market’ really entails. Consider what is happening in India today. There is a massive outflow of finance from the country because of which the rupee is depreciating vis-à-vis...
More »As the rupee touches 80 to the dollar, what does this mean for India’s economy? -Deepanshu Mohan
-Scroll.in Costlier imports and the widening of the current account deficit is likely to eat into India’s foreign currency exchange reserves. The Indian rupee touched a historical low, trading almost at Rs 80 against the US dollar on Wednesday. A knee-jerk, macro-analytical response studying India’s currency performance would mistakenly see this trend in isolation, while projecting a weakening of macro-economic fundamentals to be leading towards a depreciation. Looking closely at the numbers it...
More »Knee-Deep in Debt, Food Shortages, Depleting Foreign Reserves: How Did Sri Lanka Get Here?
-TheWire.in A foreign exchange crunch in Sri Lanka has led to a shortage of essential goods and power cuts that last up to 13 hours a day. New Delhi: Sri Lanka is grappling with the worst economic crisis in decades, which has spiked the prices of essential commodities like rice, milk powder, cooking gas and fuel. For instance, one kilogram of basmati rice currently costs between Rs 300-800 as compared to around Rs...
More »Russia’s war in Ukraine is crushing Sri Lanka’s $81 billion economy -Anusha Ondaatjie
-ThePrint.in Hit by soaring oil import costs and a dip in tourism revenue, Sri Lanka is racing to avert a default amid dwindling forex holdings. Colombo: Russia’s war in Ukraine, which has caused a humanitarian crisis and convulsed global financial markets, is now threatening to crush an $81 billion economy more than 4,000 miles away in the Indian Ocean. Hit by soaring oil import costs and a dip in tourism revenue, Sri Lanka...
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