Amidst global uncertainties, India emerged as the most sought after investment destination amongst the emerging markets on the back of governmental initiatives such as ‘Make in India’, ‘Ease of Doing Business’, ‘Digital India’, and improved foreign direct investment (FDI) policy.
Dr. Raghuram Rajan’s exit (Rexit) as the RBI governor ended on a positive note as far as India’s forex reserve is concerned. During his tenure, the economy witnessed several key achievements on macro-economic front such as lowered inflation to below 5% from a high of nearly 12%; growing GDP and a stable Indian rupee against the US dollar. The country clocked highest foreign exchange reserve (forex) of US$ 363.46 billion as on June 3, 2016. Despite erratic movements in rupee against the greenback, the stability was seen mainly on the back of investor confidence in Rajan’s own words.
Amidst global uncertainties, India emerged as the most sought after investment destination amongst the emerging markets on the back of governmental initiatives such as ‘Make in India’, ‘Ease of Doing Business’, ‘Digital India’, and improved foreign direct investment (FDI) policy. However, Rajan’s role in attracting more foreign funds in India can’t be overlooked. His long-term vision and proactive changes in FDI limits of several sectors offered companies a conducive environment for growth.
Rajan’s first year at office
On September 4, 2013, Rajan took charge as the RBI chief and in the first year itself Indian rupee appreciated by 9.66% to 60.54 as on September 3, 2014. The rupee was 67.02 against the US dollar when Rajan became the 23rd RBI governor. Despite, the rupee appreciating against the greenback, India’s forex reserve had increased over 15% to US$ 317.31 billion as on September 5, 2014, as compared to US$ 274.80 billion exactly a year ago. In the first year of Rajan, Indian equities had attracted net foreign inflow of US$ 22.39 billion buoyed by a massive 46% return in Sensex. Similarly, the debt segment had witnessed FPIs pumping in US$ 16.40 billion, which had taken the total FPI net investment in Indian securities markets to US$ 38.80 billion.
The second year
The second year saw Indian currency going upside down against the US dollar b7 9.67% to 66.40. However, the depreciation could not impact the dollar inflows in Indian economy and the nation’s forex reserve continued its upsurge for the second consecutive year for Rajan. Though at a reduced pace, India’s forex reserve had soared to US$ 349.03 billion as on September 4, 2015 as against US$ 317.31 a year ago, reflecting an increase of 10%. In the wake of increasing global economic headwinds, Indian equity markets benchmark Sensex fell by 5%. However, unshakable by the phenomenon, Indian stocks attracted FPI net investment to the tune of US$ 7.7 billion. The debt segment saw net inflows of nearly US$ 15 billion.
Last nine months
This period saw many ups and downs as the global economic scenario worsened and a conflict of interest surfaced with the government and the Central Bank. Despite this, India clocked highest forex reserve. Ever since Rajan became the RBI guv, FPIs have pumped in US$ 60.25 billion in Indian securities markets (equity + debt) as the benchmark Sensex have offered nearly 45% return.
In one of his thought-provoking addresses, Rajan stressed that the best way to have exchange rate stability is to bring down level of inflation commensurate with the global mark. He also said that our currency has been stable as investors have gained confidence in our monetary policy goals.
Amidst global uncertainties, India emerged as the most sought after investment destination amongst the emerging markets on the back of governmental initiatives such as ‘Make in India’, ‘Ease of Doing Business’, ‘Digital India’, and improved foreign direct investment (FDI) policy. However, Rajan’s role in attracting more foreign funds in India can’t be overlooked. His long-term vision and proactive changes in FDI limits of several sectors offered companies a conducive environment for growth.
Rajan’s first year at office
On September 4, 2013, Rajan took charge as the RBI chief and in the first year itself Indian rupee appreciated by 9.66% to 60.54 as on September 3, 2014. The rupee was 67.02 against the US dollar when Rajan became the 23rd RBI governor. Despite, the rupee appreciating against the greenback, India’s forex reserve had increased over 15% to US$ 317.31 billion as on September 5, 2014, as compared to US$ 274.80 billion exactly a year ago. In the first year of Rajan, Indian equities had attracted net foreign inflow of US$ 22.39 billion buoyed by a massive 46% return in Sensex. Similarly, the debt segment had witnessed FPIs pumping in US$ 16.40 billion, which had taken the total FPI net investment in Indian securities markets to US$ 38.80 billion.
The second year
The second year saw Indian currency going upside down against the US dollar b7 9.67% to 66.40. However, the depreciation could not impact the dollar inflows in Indian economy and the nation’s forex reserve continued its upsurge for the second consecutive year for Rajan. Though at a reduced pace, India’s forex reserve had soared to US$ 349.03 billion as on September 4, 2015 as against US$ 317.31 a year ago, reflecting an increase of 10%. In the wake of increasing global economic headwinds, Indian equity markets benchmark Sensex fell by 5%. However, unshakable by the phenomenon, Indian stocks attracted FPI net investment to the tune of US$ 7.7 billion. The debt segment saw net inflows of nearly US$ 15 billion.
Last nine months
This period saw many ups and downs as the global economic scenario worsened and a conflict of interest surfaced with the government and the Central Bank. Despite this, India clocked highest forex reserve. Ever since Rajan became the RBI guv, FPIs have pumped in US$ 60.25 billion in Indian securities markets (equity + debt) as the benchmark Sensex have offered nearly 45% return.
In one of his thought-provoking addresses, Rajan stressed that the best way to have exchange rate stability is to bring down level of inflation commensurate with the global mark. He also said that our currency has been stable as investors have gained confidence in our monetary policy goals.
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