There is onething missing that Masala bonds, in the discussions, i hope the minster is talking about the same NRI bonds, are likely to increase rupee appreciation by increasing its demand and not due to foreign exchange inflows alone directly, however they might increase because of strong rupee expectations but as long as there are depreciation and expectations inflows are unlikely to resume which could further worsen foreign exchange inflows unless the policy makers commit incentives to make the rupee strong...
Masala bonds do not directly increase inflows....
Oil prices, strong dollar/weak rupee and higher interest rate and expectations have spoiled the investments and growth, all because of a weak and incomplete communication by RBI, it failed to increase investment and growth and the government is resorting to base year revisions to increase growth which is more responsible for revenue growth than just oil...
At one side is oil and at the other all others, which also affects growth and revenue from all otherthings due to higher interest rate and expectations....
The Govt must refurnish the estimates and trade off between revenue from oil and from all other things.....
RBI's communication could also help increase growth and revenue; at this point it is expected to stabilize inflation and interest rate and expectations, which the government might reinforce with lower oil prices and fiscal deficit.....
The same is also responsible for the stock market rout in NBFCs witnessed recently......
The FNOG - finance neutral out gap - is only a proxy indicator of NAIRU - the non accelerating inflation rate of unemployment - in the absence of data on unemployment or full employment... The rate of growth of workforce or population decides the level of potential output or growth...Full employment means full output... The US does not use FNOG... at least i''ve not heard about it... they use full employment or the unemployment rate to decide the output gap..... and interest rate considerations...
The FNOG - finance neutral out gap - is only a proxy indicator of NAIRU - the non accelerating inflation rate of unemployment - in the absence of data on unemployment or full employment... The rate of growth of workforce or population decides the level of potential output or growth...Full employment means full output... The US does not use FNOG... at least i''ve not heard about it... they use full employment or the unemployment rate to decide the output gap..... and interest rate considerations...
The stock market investors are impatient people and less united... Investors must practice patience... They should quote a single bid price and offer price... It is the investors that make up or mar stock prices...
The 2008 financial crisis in the US was mainly a shadow banks misconduct which must be properly regulated... The bid to lend to the priority sectors could prove to be same as priority lending by public sector banks under UPA and the resulting NPAs... Government is repeating UPA...
People in INDIA do not know about the oil stock or inventories…If people would not know about demand and supply and expectations, how they would invest? Actually higher oil prices should increase supply and expectations, but it is not, because of low investment and expectations and more imports and higher dollar and expectations....
Trump has aired about supply cuts and higher oil prices and a strong dollar that increase exports to the US which may force oil companies to increase output and lower prices and reap economies of scale and profits...
People think that lower prices reduce supply, but forget that higher supply also lower prices and increase demand and expectations....
No comments:
Post a Comment