Issue: 1314
·
World Bank’s Neelkanth Mishra rejects claims that India’s
7.8% GDP growth was inflated.
·
GIFT City channels nearly $53-billion FCNR(B) mobilisation.
·
System liquidity surges to four-year high of Rs 7.7 lakh
crore.
·
ICICI Bank mobilises $17.9 billion under FCNR(B) swap
facility.
·
LCR reset creates Rs.2.1 Lakh-crore lending headroom for PSU
Banks.
·
GeM and Textiles Committee Sign MoU to Boost Procurement of
Recycled and Upcycled Textiles.
·
NSE to revise pre-open auction framework from Sept 7.
US trade deficit widens 24%
to $88.6 billion, largest since early 2025 on AI push: The US trade deficit widened sharply in July to the
largest since early 2025, reflecting a surge in imports of computers and other
technology equipment. The gap in goods and services trade grew 24.4% from
the prior month to $88.6 billion, Commerce Department data showed Thursday. The
value of imports increased 2.8% and exports fell 2.1%. The report showed an
11.4% surge in imports of capital goods — a category that includes computers
and accessories, semiconductors and telecommunications equipment but excludes
autos — the largest advance since 1993.
(Moneycontrol)
India-US trade deal to be
finalised once Washington offers competitive tariff rate, says Goyal: India will finalise the
proposed trade deal with the US once Washington is able to offer Indian
exporters a competitive tariff rate compared with rival exporting countries,
Commerce and Industry Minister Piyush Goyal said on September 3. “New
Zealand FTA will kick in soon, thereafter EU FTA will get live. As soon as the
US are able to give us a competitive rate in comparison to our competitors, we
will finalise the BTA and announce the final details,” Goyal said. Goyal added
that once these rates fall in place, Indian exporters would have no room left
for excuses — competitiveness would then hinge purely on scale, quality, and
the ability to deliver on time compared with rivals like Bangladesh and
Vietnam.
(Moneycontrol)
GDP revision being misread,
says MoSPI Secy: It is “unfortunate” that the
revision in the estimate of last year’s first-quarter GDP under the new
national accounts series is being misinterpreted as an attempt to mechanically
boost the current year’s growth rate, said Statistics and Programme
Implementation Secretary Saurabh Garg, asserting that the comparison being made
by critics mixes different GDP series and current-price and constant-price
numbers. World Bank Executive Director Neelkanth Mishra, meanwhile, described
claims that Q1 growth was actually closer to 2.6 per cent as “ill-educated” and
“egregiously wrong”, arguing that independent high-frequency indicators
corroborate the strength reflected in the official 7.8 per cent estimate.
(Business Line)
Reserve Bank of India faces
about $11 billion bill on foreign deposits plan: India tapped its vast diaspora
for a record $127 billion through a special deposit program, a fundraising
bonanza that economists say could come with a hefty $10.6 billion bill for the
country’s central bank. The potential cost stems from
the Reserve Bank’s decision to shield banks from currency risk on the funds
they raised overseas. In addition to the $127 billion raised through the so
called Foreign Currency Non-Resident (Bank) plan, the RBI also attracted $9.15
billion from overseas foreign-currency debt and external commercial borrowings.
That took the total inflows to $136.38 billion, exceeding the RBI’s $80 billion
estimate.
(Moneycontrol)
RBI meets banks as
liquidity surplus nears Rs 10 lakh crore: The Reserve Bank of India
(RBI) met top lenders on Thursday to discuss liquidity management after
measures to mobilise dollars led to larger-than-expected inflows, according to
sources close to the development. The meeting comes as surplus liquidity in the
banking system has surged, pushing overnight borrowing costs significantly
below the RBI’s policy rate. At the meeting, lenders proposed using foreign
exchange sell-buy swaps to gradually drain excess rupee liquidity from the
banking system, Reuters reported, citing sources familiar with the discussions.
(Financial Express)
Banks offer semi-fixed
loans to deploy surplus liquidity: Banks are deploying surplus
liquidity through new mortgage products. HSBC and Kotak Mahindra Bank lead with
semi-fixed home loan options. These products offer fixed rates for a period
before switching. This strategy aims to protect lending margins amid interest
rate uncertainty. Surplus funds are also being considered for government
securities.
(Economic Times)
WhatsApp launches bill
payments in India to tap into country's UPI craze: WhatsApp launched bill
payments in India on September 3, 2026. This feature allows users to pay
household and utility bills directly within the app. The service is powered by
the Bharat Bill Payment System network. Users can access over 22,000 billers
across 30 categories for payments. Meta India aims to make bill payments as
effortless as sending a message.
(Economic Times)
Russian Sberbank works
towards expansion in India: Russian banking giant Sberbank
has purchased two business towers in New Delhi and plans to use the properties
for a Russia-India trade and cooperation hub, it said at the Eastern Economic
Forum in Vladivostok. Sberbank announced plans in
June to open a Russian Business Center in New Delhi, saying it would offer
Russian companies operating in India access to banking services as well as
legal, tax, and audit support, RT reported on Thursday. The bank has operated
in India for more than 15 years, with offices in New Delhi and Mumbai, and an
IT hub in Bengaluru. It also has plans to expand its presence to ten Indian
locations.
(Economic Times)
Banks Propose Forex Swaps
to Absorb Surplus Liquidity: Indian banks have reportedly suggested that the RBI
undertake foreign-exchange sell/buy swaps to withdraw surplus rupee liquidity
gradually. Banks believe forex swaps would be less disruptive than increasing
the Cash Reserve Ratio, which could adversely affect their margins. The
proposed swaps may have maturities of up to one year and could also help the
RBI manage its forward-dollar obligations. The central bank has not publicly
commented on the proposal.
(Reuters)
SEBI Proposes Net
Settlement Facility for Mutual Funds: The Securities and Exchange Board of India has
proposed allowing mutual fund schemes to settle their cash-market transactions
on a net basis. Under the proposal, purchases and sales across eligible
transactions could be offset, reducing the amount of cash required for
settlement. The reform is expected to improve operational efficiency and lower
short-term funding requirements. It would extend to mutual funds a facility
already available to foreign portfolio investors.
(Reuters)
Bharat Forge and Thales
Sign Rocket-System Manufacturing Alliance: Kalyani Strategic Systems, the defence
subsidiary of Bharat Forge, has signed an agreement with France’s Thales to
manufacture advanced 70-mm rocket systems in India. Thales will provide
technical expertise, while the Indian partner will undertake local production
and testing. The rockets can be deployed from aerial, ground and naval
platforms, including for counter-drone operations. The first fully assembled
rocket is expected to be produced in India in early 2027.
(Reuters)
SEBI to review derivative
settlement-price methodology after CAS rollout, consultation paper in a week: Market regulator Securities and Exchange Board
of India (SEBI) is set to review the methodology for determining settlement
prices of derivative contracts following the rollout of the Closing Auction
Session (CAS) in the equity cash market, amid feedback from market participants
on its impact on expiry-day settlements. SEBI introduced CAS in the equity cash segment from
August 3, 2026, through its January 16, 2026 circular, for determining the
closing price of securities. Under the framework, the closing price determined
through CAS also serves as the basis for determining settlement prices of
derivative contracts on expiry.
(Moneycontrol)
31-member parliamentary
panel set up to examine FCRA Amendment Bill: A 31-member joint committee of the two Houses
of Parliament was constituted on Thursday to examine the contentious Foreign
Contribution (Regulation) Amendment Bill, 2026, with BJP’s Sanjay Jaiswal named
as its chairperson. The panel, which was constituted by Lok Sabha
Speaker Om Birla, has 21 members from the Lok Sabha and 10 from the Rajya
Sabha.It comprises 14 members of BJP and five of Congress. It also has two
members each from JD(U), TMC and DMK, and one member each from SP, IUML, Shiv
Sena, NCP (SP), NCP and TDP.
(Moneycontrol)
Sebi's Demat 2.0 to debut
next week with REC's tokenised bond pilot: SEBI is preparing to take a significant step
towards tokenised finance, with the launch of Demat 2.0 planned for next week,
a new framework to hold tokenised assets. According to people familiar with the
developments, this may be a pilot launch involving the country’s first
tokenised bond issuance. They added that the mechanism will use the central
bank digital currency (CBDC), or digital rupee, issued by the Reserve Bank of
India (RBI) for settlements, enabling faster transactions. The information
technology and operations teams of both depositories in India are jointly
working on Demat 2.0, sources added.
(Business Standard)
TEMPORAL METHOD in currency translation
·
The temporal method, also
known as the historical method, converts the currency of a foreign subsidiary
into the currency of the parent company. It ensures accurate profit and loss
reporting when the subsidiary operates using a different functional currency
from the local currency.
·
The parent company's currency
is often referred to as the 'functional currency,' which is the currency used
for reporting and financial statements.
·
Monetary assets and
liabilities are translated using the exchange rate at the balance sheet date,
while non-monetary items use historical rates.
·
Exchange rate gains or losses
affect the parent company’s net earnings, which can impact earnings volatility.
·
Managing foreign currency
translation effective can enhance a company's financial performance and
stability.
RBI KEY RATES
Repo
Rate: 5.25%
SDF:
5.00%
MSF
/Bank Rate: 5.50%
CRR:
3.00%
SLR:
18.00%
FOREX RATES (RBI REF. RATE)
INR
/ 1 USD : 94.4688
INR
/ 1 GBP : 127.4246
INR
/ 1 EUR : 109.6137
INR
/100 JPY: 60.0700
EQUITY INDEX
Sensex:
76152.86 (-417.49)
NIFTY:
23873.45 (-41.00)
Bnk NIFTY: 57380.60 (+208.60)
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