ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

Partha RaySubscribe to Partha Ray

Trade War and Global Economic Architecture

The recent decision of the United States to impose punitive tariffs on imports from China and the European Union, and the retaliation of these trade partners in tandem, is of concern to the global community. In analysing these contemporary events, it is argued that the genesis of the trade war can potentially be traced to the piling up of global imbalances, and the failure of the global financial institutions or fora—like the World Trade Organization and the International Monetary Fund—to address such imbalances. In such a context, whether the emerging economies have the ability to influence the course and outcomes of the current trade war, and whether this trade war can generate the possibility of reform of the international institutions are explored here.

Questioning the Orthodoxies

Statements like “money, finance and banking are at the crossroads at this juncture” have become a much-used cliché, but tend to be true for most of the recent past. This year, too, is no exception. At home we have seen that credit growth both from banks and non-banks continue to suffer...

Financial Sector in the Budget

The 2020 Union Budget has announced several small steps that could give some fillip to the financial sector in the short run, but the lack of a long-term vision for reviving an economy in downswing remains most conspicuous.

How Much of RBI’s Profit Transfer Is Enough

The Jalan Committee’s recommendations for the Reserve Bank of India to pay dividend to the government out of its current year’s surplus only after meeting the contingency risk buffer is a smart move towards the proverbial act of fine-balancing.This should put all speculations to rest about further transfers out of the central bank’s past reserves.

Much Ado About Nothing

The announcements for the financial sector in the 2019–20 budget are either too little or too grandiose relative to the actual requirements of the sector. Given this, the author questions the razzmatazz about the budget as the “auspicious” occasion for which government policy initiatives need to wait to be announced.

Monetary Policy Transmission in Financial Markets

In the Indian context, a key question is addressed: What has been the influence of monetary policy on different segments of the financial markets? Constructing a structural vector autoregressive model with the monetary policy rate, the pattern of monetary transmission to financial markets is examined over three distinct periods of regime changes in the Indian monetary policy and liquidity management framework. The empirical evidence indicates that there is sufficient period-specific transmission of monetary policy across the different segments of the financial markets. While the transmission of monetary policy to the money and bond markets is found to be fast and efficient, the impact of the policy rates on the forex and stock markets is limited.

Recent Downfall of the Indian Rupee

Assessing the trends in India’s balance of payments, it is argued that a combination of substantial trade deficit and a significant current account deficit financed predominantly by fickle portfolio investments could have made the rupee vulnerable to the moods of the global capital market. India’s huge dependence on oil imports along with high gold and electronic imports could also have played their roles in making the exchange rate volatile.

The LIC–IDBI Deal

In the context of the recent deal between the Life Insurance Corporation of India and Industrial Development Bank of India, is this proposed investment prudent from its impact onLIC’s balance sheet and income prospects as well as from an average premium payers’ standpoint? A possible alternative in whichIDBI’s retail assets could have been sold to a commercial bank and the remaining project finance portfolio turned into a wholesale and long-term finance bank is discussed.

Pages

Back to Top