Balace of Payment Forecasting and Currency Movements

8/11/2019 Balace of Payment Forecasting and Currency Movements.

1/63

A

PROJECT REPORT

ON

Balance of Payment Forecasting

&

Its effects on Currency Movement

MASTERS OF MANAGEMENT STUDIES (MMS)

UNIVERSITY OF MUMBAI

SUBMITTED TO

MARATHA MANDIRS

BABASAHEB GAWDE INSTITUTE OF

MANAGEMENT STUDIES

MUMBAI CENTRAL

SUBMITTED BY

NEHA VYAS

Batch-20! R"## $"-%(FINANCE)

1


2/63

DECLARATION

I! N&ha V'a! h&&*' +&c#a& that th& ,"&ct t.t#&+ /Ba#a$c& " ,a'1&$t "&cat.$ 3

.t &&ct "$ c4&$c' 1"5&1&$t6 . a$ "..$a# 7"8 ca.&+ "4t *' 1&! at 9a.$

I.at."$ S't&1 #t+! M41*a.! I$+.a! a ,at.a# 4#.#1&$t " MMS +&&& "

Ba*aah&* Ga7+& I$t.t4t& " Ma$a&1&$t St4+.& (BGIMS): Th& .$"1at."$

.$c","at&+ .$ th. ,"&ct . t4& a$+ "..$a# t" th& *&t " 1' 8$"7#&+&:

Place: MUMBAI

DATE: 23/07/2010 Signature

2


3/63

ACKN!"ED#EMENT

W.th a## 1' .$c&& at.t4+&! I 7"4#+ #.8& t" tha$8 a## th"& 7h" ha5& c"$t.*4t&+ .$ th.

,"&ct 3 h,&+ 1& .$ c"1,#&t.$ 1' ta8

I tha$8 M: D&&,a8 M4$+a! 7h" ha *&&$ 1' 1&$t" +4.$ th. ,"&ct &,"t M:

M4$+a . S: V; (F.$a$c&) " 9a.$ I.at."$ S't&1 #t+ :

I a1 a#" at&4# t" M: Ma$.h Sh.5ata5a 7h"& c"$t.$4"4 4.+a$c& a$+ 4,&5.."$

&$a*#&+ 1& t" ,&"1 1' *&t +4.$ th& .$t&$h., ,&."+!

I &


4/63

CNTENTS

r! No u" r! To#ic Page No!

$ E%ecutive ummary

' O"(ective of t)e tu*y +

, -iterature Revie./ JI- Overvie. 0

,!$ BOP 1ey factors 2

,!' Com#onents of BOP $3

,!, BOP 4istorical Overvie. $+

,!5 Relations)i# Bet.een BOP & Currency Movement ''

,! 6)at 7rives Foreign Currency Movements! '5

,!+ Im#ortance of BOP from t)e 8ie.#oint of Business! '0

,!0 Fore% Ris9 Mitigation Tec)ni:ues '2

5 Researc) Met)o*ology ,+

BOP Forecasting Mo*el ,;+ Analysis of 7ata 5'

0 Fin*ings 3

; C)allenges in In*ia to Maintain BOP ur#lus '

2 Pro(ections of BOP "y Ban9s ,

$3 -imitations +

$$ Conclusions & Bi"liogra#)y 0

$< E%ecutive summary

Th& 7"#+ .$ th& t7&$t' .t c&$t4' ha *&c"1& a +'$a1.c ,#ac& 7h&& $at."$ a$+

c"4$t.& +" $"t ha5& a$' *"4$+a.&: G#"*a#.>at."$ ha *&&$ th& 8&' *&ca4& "

7h.ch th& 7h"#& 7"#+ . $"7 a #"*a# 5.##a&: Th. &a1#&$& #&a+ t" a##

&c"$"1.& .$ th& 7"#+ t" ca' "4t 5a."4 ta$act."$ 7.th &ach "th&! 7h.ch *&a

a$ &c"$"1.c 5a#4&: A## th&& ta$act."$ a& &


5/63

T" a,,&c.at& th&& ta$act."$! 7h.ch .$5"#5& "&.$ &


6/63

,< -iterature Revie.

Jain Irrigation ystems lt* >JI-< ///an overvie.

Jain Irrigation ystems("t&$ 8$"7$ a Jain Irrigation! JI-! " .1,#' Jains) . a

14#t.$at."$a# "a$.>at."$ *a&+ .$ 9a#a"$! Mahaahta! I$+.a: 9ISL &1,#"' "5&

!000 7"8& a$+ 1a$4act4& a $41*& " ,"+4ct! .$c#4+.$ +., a$+ ,.$8#&

..at."$ 't&1 a$+ c"1,"$&$t! ;VC! ;E ,.,.$ 't&1! ,#at.c h&&t.$!

&&$h"4&! *."-&t.#.>&! "#a 7at&-h&at.$ 't&1! a$+ ,h"t"5"#ta.c a,,#.a$c&:

9ISL a#" ,"c&& +&h'+at&+! c"$c&$tat&+! a$+ ">&$ 4.t a$+ 5&&ta*#&: It .

&


7/63

#.t&+ "$ th& B"1*a' St"c8 E


8/63

Cor#orate Ran9ings

9a.$ I.at."$ S't&1 Lt+ (9ISL) .$ 200 a$8&+ 00th "$ th& #.t " c"$#"1&at&

.$ Mahaahta:

9ISL 7a #.t&+ th .$ th& FE-00 a$8.$ " 200 *' I$+.a B4.$& I$.ht 5.a

Th"1"$ D.a#" N&7E+&:

Sta$+a+ 3 ;"" .+&$t..& 9a.$ I.at."$ S't&1 Lt+: a1"$ #.t " ?00 7"#+-

*&at&:

Th& Ca7"+ R&.+ M&1".a# A7a+ .$t.t4t&+ *' th& US-*a&+ I.at."$ A"c.at."$

7a .5&$ t" B:H: 9a.$! "4$+& a$+ cha.1a$! " /S.$..ca$t C"$t.*4t."$ t" th&

I.at."$ I$+4t' "4t.+& th& U$.t&+ Stat&:6

,!$< Balance Of Payments/ 1ey Factors!

Ba#a$c& " ,a'1&$t . a S't&1at.c &c"+ " a## &c"$"1.c ta$act."$ +4.$ a

.5&$ ,&."+ *&t7&&$ &.+&$t " "$& c"4$t' a$+ &.+&$t (.$c#4+.$ th&

"5&$1&$t) " "th& c"4$t.&: It . a$ acc"4$t.$ &c"+ " a## 1"$&ta' ta$act."$

" "$& c"4$t' 7.th "th&: Th& ta$act."$ a& ,&&$t&+ .$ th& "1 " +"4*#&-&$t'

*""88&&,.$: Th& ta$act."$ .$c#4+& &


9/63

ca,.ta# 3 .$a$c.a# ta$&: It *a.ca##' c"1,.& " "4c& " 4$+ &c&.,t a$+

a##"cat."$ " 4$+ ,a'1&$t: Th& BO; 411a.& .$t&$at."$a# ta$act."$ " a

,&c..c ,&."+! 44a##' a '&a! a$+ . ,&,a&+ .$ a .$#& c4&$c'! t',.ca##' th&

+"1&t.c c4&$c' " th& c"4$t' c"$c&$&+: S"4c& " 4$+ " a $at."$! 4ch a

&&" th&& ca$ *& $" "5&a## 4,#4 " +&.c.t: F" &


10/63

a) Th& C4&$t Acc"4$t

*) Th& Ca,.ta# Acc"4$t

c) Th& R&&5& Acc"4$t

a< T)e Current Account

C4&$t acc"4$t .$c#4+& 1&cha$+.& a$+ .$5..*#& acc"4$t: A## th& ta+&

ta$act."$ at.$ t" 1"5a*#& ""+ a& c"5&&+ 4$+& 1&cha$+.& acc"4$t a$+

ta+& .$ &5.c&! ta$act."$ " .$5&t1&$t .$c"1& a$+ .t a& .$c#4+&+ .$ th&

.$5..*#& acc"4$t: Th& "##"7.$ . th& +&ta.#&+ +&c.,t."$ " &5&' #.$& .t&1 .$ th&

c4&$t acc"4$t:

i< Merc)an*ise Account

) E


11/63

" th& ""+ ,a& "$ "1 th& &


12/63

(.) Ta5- I$+.a$ *4'.$ t.c8&t " "&.$ a.#.$&! a5a.#.$ " th&. ta5 &5.c& .

.$#"7 .$ th. acc"4$t: Wh.#& "&.$& *4' t.c8&t " a.#.$& .$ I$+.a! . a$ "4t#"7:

(..) Ta$,"tat."$- ta$,"tat."$ " ""+: Wh&$ I$+.a$ a5a.# "&.$ h.,,.$ "

ca" &5.c&! .t . "4t#"7 " 1"$&' a$+ 7h&$ "&.$& a5a.# " I$+.a$ ca"

&5.c&! .t . .$#"7:

(...) I$4a$c&- I$4a$c& c"5& ,4cha&+ *' I$+.a$ "1 "&.$ .$4& . "4t#"7

a$+ &5&& . .$#"7:

(IV) M.c#a$&"4- a## &


13/63

?) ;.5at& Ta$& It c"1,.& $&t ta$& ,a'1&$t *&t7&&$ ,.5at& ,&"$ a$+

$"$".c.a# "a$.>at."$ " th& &,"t.$ c"4$t' a$+ th& &t " th& 7"#+ that ca'

$" ,"5.."$ " &,a'1&$t: It a#" I$c#4+& 7"8& &1.tta$c&J ta$& *'

1.a$tJ .t! +"7.&! a$+ .$h&.ta$c&J a$+ a#.1"$' a$+ "th& 4,,"t &1.tta$c&:

@) I$5&t1&$t I$c"1&- .$c"1& +&.5&+ "$ .$5&t1&$t a*"a+: I$c"1& +&.5&+ *'

I$+.a$ "$ th&. a&t! #"a$! t"c8 .$5&t1&$t a*"a+ .$ th& "1 " .$t&&t!

+.5.+&$+ a$+ ,".t:

) C"1,&$at."$ " &1,#"'&&- It C"1,.& &1.tta$c& " .$c"1& *' 1.a$t 7h"

ha5& c"1& t" a$ &c"$"1' t" ta' " a '&a " 1"& a$+ 7h" a& &1,#"'&+ *' th&.

$&7 &c"$"1'! 7h&& th&' a& c"$.+&&+ t" *& &.+&$t:

"< T)e Ca#ital Account

Th& ca,.ta# acc"4$t ca$ *& c#a..&+ *' .$t41&$t (+&*t " &4.t') 3 1at4.t' .:&:

(h"t " #"$ t&1): Th& 1a.$ c"1,"$&$t " ca,.ta# acc"4$t a& "&.$ .$5&t1&$t!

#"a$! *a$8.$ ca,.ta#:

13


14/63

F"&.$ .$5&t1&$t c"1,..$ FDI 3 ,"t"#." .$5&t1&$t &,&&$t $"$-+&*t

#.a*.#.t.& 7h&&a #"a$ (&&$ a& .$5&t.$ .$ a "&.$ c"4$t'!

that a$ "4t*"4$+ #"7 that 7.## c"4$t a a +&.c.t: At& th& .$.t.a# .$5&t1&$t! a$'

'&a#' ,".t $"t &-.$5&t&+ 7.## #"7 .$ th& ",,".t& +.&ct."$! *4t 7.## *& &c"+&+

.$ th& c4&$t acc"4$t ath& tha$ a ca,.ta:

2) ;"t"#." .$5&t1&$t- .t && t" th& ,4cha& " ha& a$+ *"$+: It "1&t.1&

"4,&+ t"&th& 7.th K"th&K a h"t t&1 .$5&t1&$t: Th& ca,.ta# acc"4$t &$t' .

" a$' .$t&$at."$a# *4'.$ a$+ #.$ " th& ,"t"#." a&t:

?) ;.5at& S&ct" Ca,.ta# F#"7- Th. c"$.t " #"a$ &c&.5&+ *' ,.5at& &$t.t.&

("th& tha$ *a$8).$ I$+.a "1 $"$-&.+&$t! .$5&t1&$t *' "&.$& .$ ha& "

I$+.a$ C"1,a$.&! &,a'1&$t " #"a$ t" &.+&$t *' $"$-&.+&$t! &,at.at."$ "

I$+.a$ .$5&t1&$t a*"a+:

1$


15/63

4) Other investment.$c#4+& ca,.ta# #"7 .$t" *a$8 acc"4$t " ,"5.+&+ a #"a$:

La& h"t t&1 #"7 *&t7&&$ acc"4$t .$ +.&&$t $at."$ a& c"11"$#' &&$

7h&$ th& 1a8&t . a*#& t" ta8& a+5a$ta& " #4ct4at."$ .$ .$t&&t at& a$+ " th&

&


16/63

*a#a$c& " ,a'1&$t ,"*#&1: D4.$ th. ,&."+! th& ta+& +&.c.t 7a .$a$c&+ *'

$&t &c&.,t "1 th& .$5..*#& a$+ ta$&: Th& c4&$t acc"4$t +&.c.t! th&&"&! .

5&' 1a##:

S.$c& th& *&.$$.$ " th& &c"$+ .5& '&a ,#a$! I$+.a ha &


17/63

R: c"& ( 1.##."$) .$ 9a$4a' : D4.$ th. ,&."+ th& G"5&$1&$t

ha+ t" ta8& &c"4& t" IMF t" "5&c"1& th& *a#a$c& " ,a'1&$t +..c4#t.&: Th&

1a.$ act" &,"$.*#& " th& ha, a## .$ &&5& 7a th& ha, .& .$ th& .1,"t

" ;OL: H"7&5&! th& ,a'1&$t c.. " 0- 7a $"t .1,#' +4& t" +&t&."at."$

"$ th& ta+& acc"4$t! .t 7a acc"1,a$.&+ *' "th& a+5&& +&5",1&$t "$ th&

ca,.ta# acc"4$t &ct.$ th& #" at h"1&! c"4,#&+ "5&$1&$t a*.#.t' t" 1a$a& th&

.t4at."$: ;"#.t.ca# 4$c&ta.$t' at h"1&! c"4,#&+ 7.th ..$ .$#at."$ a$+ 7.+&$.$

.ca# +&.c.t! #&+ t" a #" " .$t&$at."$a# c"$.+&$c&:

I$+.a &c"4& t" th& c"11&c.a# *""7.$ t"ta##' +.&+ 4, a th& c&+.t

at.$ a&$c.& +"7$a+&+ I$+.a: S.14#ta$&"4#'! th&& *&a$ a$ "4t#"7 " $"$-

&.+&$t I$+.a$ +&,".t: I$ a++.t."$ th&& 7&& &."4 +..c4#t.& .$ th& "##.$ "5&

" h"t t&1 c&+.t! 7h.ch 7a "4h#' " th& "+& " *.##."$: Wh.#& c4&$t

acc"4$t +&.c.t " th& "+& " *.##."$ 7a &a.#' .$a$c&+ .$ -! a +&.c.t "

:% *.##."$ .$ 0- *&ca1& a#1"t .1,".*#& t" .$a$c&:

B' 94$& ! th& *a#a$c& " ,a'1&$t c.. ha+ *&c"1& "5&7h.$#' a

c.. " c"$.+&$c&! .:&: a c.. " c"$.+&$c& .$ th& "5&$1&$t a*.#.t' t" 1a$a&

th& *a#a$c& " ,a'1&$t: A +&a4#t "$ ,a'1&$t ha+ *&c"1& a &."4 ,".*.#.t' .$

94$& " th& .t t.1& .$ th& I$+.a$ h.t"':

A +&a4#t . &&$t.a##' a a.#4& t" &,a' +&*t! *4t .t a1..cat."$ a& $&5&

c"$.$&+ t" +&*t: A +&a4#t .$ ,a'1&$t .$&5.ta*#' #&a+ t" a *&a8+"7$ .$ c&+.t

a5a.#a*.#.t' a$+ $"1a# ,a'1&$t aa$&1&$t: S4,,#.& *&c"1& cta$t t" #

17


18/63

""+ a$+ &5.c& a$+ .$.t "$ a+5a$c& ,a'1&$t th"4h *a$8 " th&. "7$

c"4$t': Th. #&a+ t" &5&& ta+& +.4,t."$ 7h.ch .$ t4$ "c& &5&& a$+

,"#"$&+ .1,"t c"1,&."$ a$+ &4#t .$ h"ta&! .$+4t.a# +.#"cat."$! a$+

&5&& 4$&1,#"'1&$t a$+ h.h .$#at."$:

Th& $&7 "5&$1&$t " M: ;: V: Nah.1a Ra" 7h.ch a41&+ ".c& .$ 94$&

act&+ 7.t#' a$+ t""8 1&a4& 7h.ch .&+ "$ a c"1*.$at."$ "

1ac"&c"$"1.c ta*.#.>at."$ a$+ t4ct4a# &"1 .$ .$+4t.a# a$+ ta+& ,"#.c.&:

Th& &


19/63

I$+.a ha &1&&+ t"$& .$ .t &


20/63

Th& &a#' 0 a7 a 4& .$ &


21/63

Balance of Payment ur#lus

A #"7 c4&$t acc"4$t +&.c.t . a h&a#th' .$+.cat" " th& c"4$t' *a#a$c& "

,a'1&$t ,".t."$: W.th th& t"$ ca,.ta# #"7 ($&t) "1 ?-@ "$7a+! I$+.a

c"4#+ &a.#' .$a$c& th& c4&$t acc"4$t +&.c.t a$+ a++ .>&a*#& a1"4$t t" th&

"&.$ &


22/63

,!5< T)e Relation Bet.een Balance Of Payments An* Currency Movements!

A 7& 8$"7 th& *a#a$c& " ,a'1&$t . a &c"+ " "&.$ c4&$c' ,a'1&$t a$+

&c&.,t " a c"4$t': F"&.$ C4&$c' .$#"7 a$+ "4t#"7 ta8& ,#ac& +4& t" th&&

B"; ta$act."$: Th& #"7 a$+ th& +.&ct."$ " "&.$ c4&$c' #&a+ t" .$c&a& "

+&c&a& .$ th& +&1a$+ a$+ 4,,#' " that c4&$c': Th& .$c&a& " +&c&a& .$

+&1a$+ a$+ 4,,#' " that c4&$c' 7.## th&&"& &4#t .$t" th& a,,&c.at."$ "

+&,&c.at."$ " th& h"1& c4&$c'! " & . "4 &


23/63

S4,,#' a$+ D&1a$+ " a c4&$c' +&t&1.$& .t &


24/63

a,,&c.at& (*&ca4& th. 1a8& &


25/63

F"&.$ c4&$c' 1a8&t . #a' +&1a$+ a$+ 4,,#' +.5&$: S" . th& +&1a$+ "

"$& c4&$c' "& 4,! .t 5a#4& a,,&c.at& " . a c4&$c' . .$ a*4$+a$t 4,,#'! .t

5a#4& 7.## +&c#.$&: A c4&$c' t&$th . 1a.$#' +&t&1.$&+ a$+ +.5&$ *' th&

t&$th " th& &c"$"1' " th& c"4$t' that .t &,&&$t: F" &


26/63

C)anges in t)e ol* Prices

A$ .$c&a& " +&c&a& .$ th& ,.c& " "#+ ha a$ .$ta$t .1,act "$ th& c4&$c.& "

c"4$t.& 7h.ch a& th& 1a" ,"+4c& a$+ &


27/63

Central Ban9 or overnment Intervention

S"1&t.1&! a c"4$t' c&$ta# *a$8 a#" ,at.c.,at& .$ th& F"&< 1a8&t .$ a *.+ t"

ta*.#.>& ,.c&: A c&$ta# *a$8 1a' #""+ th& F"&< 1a8&t 7.th th&. c"4$t'

c4&$c' .$ a *.+ t" #"7& .t ,.c&: O! th&' 1a' *4' a .$..ca$t a1"4$t " th&.

"7$ c4&$c' a$+ th4 t' t" *""t .t ,.c&:

Ma$' a t.1&! .t . $"t th&& act" *4t 1&' ,&c4#at."$ a*"4t th&& act" that

#&a+ t" cha$& .$ th& 5a#4& " th& c4&$c' " a ,at.c4#a c"4$t': A#th"4h "&.$

c4&$c' 1a8&t 1"5& .$ &,"$& t" cha$& .$ a$' " th& a*"5& act"! th& .1,act

. h"t t&1: Th& &$"1"4 .>& a$+ th& 1a.5& 5"#41& 7.t$&&+ .$ th& "&.$

&


28/63

,!+< Im#ortance of "alance of #ayments from t)e vie.#oint of "usiness managers

B4.$& 1a$a& a$+ .$5&t" $&&+ BO; +ata t" a$t.c.,at& cha$& .$ h"t c"4$t'

&c"$"1.c ,"#.c.& that 1.ht *& +.5&$ *' BO; &5&$t: F"1 th& ,&,&ct.5& "

*4.$& 1a$a& a$+ .$5&t" th& "##"7.$ a& th& th&& ,&c..c .$a# that a

c"4$t' BO; +ata ca$ ,"5.+&:

Th& *", . a$ .1,"ta$t .$+.cat" " ,&4& "$ a c"4$t' "&.$ &


29/63

A c"1,a$' .$ t"+a' 7"#+ &


30/63

,!0< FORED RI1 MITIATION TEC4NIE E7 BG COMPANIE

M.t.at.$ "&.$ &


31/63

Th& c"1,a$' 1a' a#" *4' th& "&.$ c4&$c' a$+ ,#ac& .t "$ +&,".t 7.th a *a$8

t" &a$ .$t&&t a$+ 4& .t t" ,a' " th& ,a'a*#& at 1at4.t': Th. act."$ 7.## &$a*#& th&

c"1,a$' t" .< th& &


32/63

/Balance )eet 4e*ging

F"&.$ c4&$c' ",t."$ ,"t&ct aa.$t a+5&& "&.$ &


33/63

Measuring Foreign E%c)ange E%#osure

/Transaction E%#osure

Ta$act."$ .$ th& "1 " ,4cha& c"$tact " a&&1&$t +&$"1.$at&+ .$ a

"&.$ c4&$c' *4t $"t '&t &tt#&+ c&at& ta$act."$ &


34/63

,&,a&+ a$+ c"$5&t&+ t" th& #"ca# c4&$c' " th& "7$& " .$5&t": Th. "1 "

&at."$: Stat&.c ,#a$$.$ " ",&at."$ 14t .$c#4+&

&c"$"1.c &


35/63

a $"$-+.5&a*#& c4&$c' 1a8&t: B' h&+.$ 7.th a $"$-+.5&a*#& "7a+! a

,4cha& ca$ ,"t&ct aa.$t at& #4ct4at."$ ath& tha$ &tt#.$ a ta$act."$ at

1at4.t' 4.$ th& &


36/63

Th& a+5a$ta& " ",t."$ "5& 4t4& . that th& "1& #.1.t th& +"7$.+& t" th&

&


37/63

5< REEARC4 MET4O7O-OG

S"4c& " Data

$:Primary *ata 7a c"##&ct&+ th"4h .$t&5.&7 7.th th& &$." &c"$"1.t " Y&

*a$8 a*"4t th& "&cat.$ 1&th"+ 4&+ " *a#a$c& " ,a'1&$t "&cat.$ *' th&1:

'! econ*ary *ata "4c& c"1,.&+ " Ec"$"1.c T.1& $&7,a,&! ,&."+.ca#

"1 ICICI! CITI *a$8 &tc! #at .< '&a *a#a$c& " ,a'1&$t "1 th& RBI 7&*.t&!

*""8 "$ F"&< .8 1a$a&1&$t *' A:V:Ra7a+& a 7# a "th& 7&*.t& "1 th&

.$t&$&t:

T)e met)o*ology use*

) Th& 4at' *", "1 '&a 200@- t" 200-0 7&& c#4**&+ t"&th& t" &t a

+&ta.#&+ 5.&7 " th& t&$+ "##"7&+ *' &5&' #.$& .t&1 .$ &ach 4at&:

2) E5&' .t&1 ,&c&$ta& t" GD; " I$+.a .$ that &,&ct.5& '&a 7a ta8&$ "4t t"

8$"7 th& a,,"


38/63


39/63

< T4E BOP FORECATIN MO7E-

T" c&at& a "&cat.$ 1"+ at .t 7& $&&+ t" acc414#at& h.t".ca# +ata: H&$c& I

ha5& c"##&ct&+ *a#a$c& " ,a'1&$t " th& #at .< '&a! *"th '&a "$ '&a a$+

4at' +ata: O4 "*&ct.5& h&& . t" "&cat &ach a$+ &5&' #.$& .t&1 " th& *",

c4&$t acc"4$t: T" #&a$ th& 1&th"+"#"' *&h.$+ th& "&cat.$ I 1&t 1. Bha5a$a

Mahaa$! S&$." &c"$"1.t 7.th Y& Ba$8:

A ,& h& 4.+a$c& I ha5& t.&+ t" "&cat th&

c4&$t acc"4$t a$+ t" "1& &


40/63

*) T&$+

4y#ot)esis

/Th& h',"th&. " "4 1"+ " "&cat.$ . that th& I$+.a$ &c"$"1' 7.## c"$t.$4&

t" &


41/63

$1


42/63

$2


43/63

$3


44/63

ource/official .e"site of *e#artment of commerce!

+< Analysis of 7ata

Th& "##"7.$ . th& *a#a$c& " ,a'1&$t " th& #at '&a a$+ th& ,&c&$ta&

"7th " &ach #.$& .t&1 t" th& +, " I$+.a a$+ 4at& 7.& "7th:

FG '335/3

Major Items of India'sBalance of Payments

Billi)n *

ITEM Q1 Q2 H1 Q39MTH Q4 H2 F!4

1" E#$orts17+' 1'+' 3&+& 20+' %7+$ 2$+% $%+3 '1+(

as a % of &P2"(4

2")9

("23

2"9* +"2 3"( )"4* 11+7

2" Im$orts 23 2'+% %1+% 32+& '$+1 3$+& &7+2 11'+7as a % of &P

3"2+4"!)

*"34

4")( 1"2

4"94 9"(9 1&+(3

3" Trade Balance ,1-2.,%+1 ,(+&

,1$+7

,11+7 ,2&+$

,10+1 ,21+' ,3&+%

as a % of &P -*"3+

-1"3

-2"1

-1")

-3"*+ -1"4

-3"11

,%+22

$$


45/63

* 1 * 44" In/isi0les et '+% &+1 1$+& &+2 20+' 10+& 1&+' 31+$

as a % of &P1"22

+"*4

2"!9

+"9* 2"99

1"(2

1!"49 12+%'

(" rrent ccont

Balance ,354 . 3+3 ,3+$ ,0+1 ,%+$ ,%+% 0+% ,$+( ,%as a % of &P

4"+3

-4"99

!"!1

-*"*3 -*"91

!"!*(

-*")((

,7+&$%

)" a$ital ccontBalance6 $+1 2+' &+(

12+03 1'+(3 12+1

2$+13 31+03

as a % of &P !"(9 !"4 11"*1 2"*2

1"*2 3"43 $+$3

i. Forei7n irectIn/estment 0+7 1+2 1+( 0+$' 2+3' 0+%( 1+07 2+(7

ii. Portfolio In/estment 0+0' 0+$ 0+$' $+% $+(' 3+' '+3 '+7'

iii. E#ternal ssistance

0+03

& 0+2(

0+32

& 0+3& 0+&'& 1+2 1+%& 1+''&i/. E#ternal ommercialBorro8in7s 1+07 0+%$ 1+&1 1+7( 3+$ 2+1 3+'( %+%

/. Banin7 a$ital 2+% ,0+3 2+2 1+%( 3+7( 2+&' $+27 &+$7

/i. on-resident e$osits,0+7'

,0+$&

,1+2$ 0+0% ,1+1( 0+2$ 0+2( ,0+(%

/ii. :;ort Term redit 1+7 0+1' 1+'' 0+77 2+&% 0+'2 1+%( 3+$7

/iii.


46/63

& 2 %

as a % of &P4"))

4"**

9"43 4"*

("22

9"94 1(+$

3" Trade Balance ,1-2.,13+&

1&2+(

,1$+&

%1+(

,2'+2

,11+' 0+'

,11+7 1&

,23+%

,%1+7

as a % of &P

-1")* 1"+

3"4+

1"4)

1"4( 2"9 &+3'

4" In/isi0les et10+0$ 17

(+%' %&

1(+&2

'+01 27 1$+% 3&

22+% $2+1

as a % of &P1"24

1"1+

2"42

!"9+

1"*9

2"*+ %+2

(" rrent ccontBalance ,354 . ,3+%

,20$+'

,%+0$ $$

,'+%$ ,3+' ,2( 2+7 $23

,1+1

,(+&$

as a % of &P

-

!"43

-

!")2

1"!*

!"4*

!"34

!"13 1+2

)" a$ital ccontBalance6 $+' 1$+(

10+3 2%( 1%+1

,0+'$

,107 10+$ ,13

(+%& 2$+7

as a % of &P!"(9

1"2*

1"+)

-!"1

1"29

1"1+ 3+0$

i. Forei7n irectIn/estment 1+1 &7

11+( '3' 13

1+$1(1 2 2$$ 3+$ 1&+$

ii. PortfolioIn/estment 0+(7

1100

$+$ 17+7 %+37 2+7 ,$0 $+3 1$ 7 12+$

iii. E#ternal ssistance 0+2$''+'

0+1' '+% 0+3'

0+$7 31 0+%& ,%$

1+03 1+$1

i/. E#ternalommercialBorro8in7s 1+0( 1+$

1+7%

7+' 2+'$

,$+2,33' 3+02 $1

,1+1' 1+&&

/. Banin7 a$ital 0+7' ,&(

1"99

,1'+2 2+77

,0+(7

,1&1 ,0+$

,11&

,1+37 1+$

/i. on-residente$osits ,0+1 ,'&

0+3$

,11$& 0+2$

0+'' 1%3

1 1+&7 %(%2+%% 2+7(

/ii. :;ort Term redit,0+1%

,10'+%

1+12 '(7

7 0+(7

0+7%

,2

,0+023

,102

0+73 1+7

/iii. eser/es ?,- indicates Inc = 5indicates ec. ,1+2 ,'3

("2(

,(2( $+0%

$+&7

,170

,13+2 $+&

,'+%3

,$+$'

FG'33/3+

$&


47/63

FG '33+/30

Major Items of India'sBalance of Payments US * -illi)n

ITEM Q1%&r

Q2

%&r H1 Q3

%&r

Q4

%&r

H2

F!)

1" E#$orts2(+& 22+' 33

3%+(

&2+3

30+& 1& 3& 1&+7 && 12(

as a % of 7d$3"24 66

3") 66

)"+1

3"3( 66

3"9 66

*"3 1$+1

2" Im$orts$&+& 23 $(

2%+%

(%+1

$7+% 2$ $( 1$+7 (& 1(1

as a % of 7d$("!9 66

("3 66

1!"4

("19 66

("3 66 11 20+(

3" Trade Balance ,1-2.

,1&+( 2$+%

,1& '+$

,32+7

,1&+' $2

,13 (+%

,30

,&2+3

as a % of 7d$

1"+

( 66

1"

* 66

3"(

+

1"+

4 66

1"

4 66

3"

2 &+'2

4" In/isi0les et12+3 23 11 1%

23+3 1$ 7%+' 17 1' 31 %$+$

as a % of 7d$1"3( 66

1"2 66

2"((

1"(3 66

1"9 66

3"4 %+(&

(" rrent ccontBalance ,354 . ,$+% 2' ,% ,$ ,(+3 ,2+7 ,27

$+2 %$

1+% ,7+'

as a % of 7d$

-!"49 66

!"( 66

1"!2 !"3 66

!"( 66

!"2 1+1'

)" a$ital ccontBalance6

10+(

127+'

7+1 ,31 1'

10+2

,131% 1& %$ 2& $$+$

as a % of 7d$1"19 66

!"+ 66

1"9*

1"12 66

1"+ 66

2"9 $+'&

i. Forei7n irectIn/estment 1+7 $$

2+% ,7( $+2 2.5 '1 2 0

$+% '+73

ii. PortfolioIn/estment

,0+%2 ,1%$

2+1 ,(7

1+%' 3.5 2(+'

1+' ,%7

%+3 &+''

iii. E#ternal ssistance 23 ,'(0+3 ,((

23+3 0.6 32+7

0+7 32+&

1+3 2$+&

i/. E#ternalommercialBorro8in7s 3+% 22&

1+2 ,(7 $+7 3.9

,1(3

&+&

120+7 11 1%+2

/. Banin7 a$ital %+07

%$( ,2 ,103

3+27

-3.3 2$2 2+2

,&30 ,1+

2+17

$7


48/63

1

/i. on-residente$osits 1+2

,12$0

0+' ,'3

1+(( 1.2 $0

0+& ,&2

1+' 3+7(

/ii. :;ort Term redit 0+$ ,37&1+% ,(1 1+( -0.3

,1$2

1+&

,

71$3

1+3 3+2

/iii.


49/63

(" rrentccont Balance,354 . ,&+3 37+( ,$+( 2

,11+2 ,%+1 '$ ,1+0$ ,12$

,&+1$

,17+3

as a % of &P!"(3 !"41

!"9(

!"43 !"!+ !"(2 1+$7

)" a$ital ccontBalance6

17+% %(+' 3$+1 3'1

%1+&

31+'

20(+'

2&+03 &0+&

%7+'3

10(+$

as a % of &P1"4+ 66 2"+9 66

4"3*

2")9 66 2"2 66 4"9 (+27

i. Forei7n irectIn/estment 2+& %3+( 2+1 ,1% $+7

2+0$ ,20 &+3

211+7 '+3$

13+0$

ii. PortfolioIn/estment 7+$

,1%1%

10+'7 $0'

1'+3

1$+' 31& ,3+7 ,302 11+1

2(+37

iii. E#ternalssistance 0+2

($7+' 0+$% $&

0+&% 0+%

,10+7 0+' 11+' 1+3 1+(%

i/. E#ternal

ommercialBorro8in7s &+( (& 3+% 1'& 10+$ &+2 %& $+' ,27 11 21+$

/. Banin7a$ital

,0+$7 ,10( &+1'

,$3'

%+71

1+0& ,131 %+' 1%7 &+'&

12+%7

/i. on-residente$osits

,0+$$ ,13& 0+3& ,%$

,0+0'

,'%3 ,1&( 1+1 7%+(

,'%1+( ,'%2

/ii. :;ort Termredit 1+'

332+& 3+% 13$ %+3

$+13

,1$0& &+3 2'(

10+$3

1%+73

/iii.


50/63

ITEM Q1%&r Q2

%&r H1 Q3

%&r Q4

%&r H2 F!+

1" E#$orts $(+1 37 $'+( 30 ('37+2 ,1

3(+' ,7 77 17%

as a % of &P 4"23 66

4"2

2 66

+"4

(

3"2

1 66

3"4

3 66

)")

4

1%+0

(

2" Im$orts '0+%$2+& '7+& %0+(

1&'+1

71+( &+'

%$+$ ,1'

12&

2($+$

as a % of &P )"94 66*"(( 66

1"4( )"2 66

4")9 66

1!"9

12+3$

3" Trade Balance,1-2.

,31+$

%1+'

,3'+& ''+( ,70

,3$+7 3'

,1$+%

,3'+&

,$(+2 ,11(

as a % of &P 2"* 663"33 66

)"!4

-2"99 66

1"2( 66

4"2(

10+2(

4" In/isi0les et 22+$

%%+

% 2&+1 &' $'+%

21+

& '

1(+

3

,

1$+(

$0+

( '(+$

as a % of &P 1"93 662"2( 66

4"1+

1"+) 66

1")) 66 3"( 7+&'

(" rrentccont Balance,354 .

,(+01 $3

,12+% 1%3

,21+% ,13

1%$+7 $+7 ,%%&

,'+33 ,2(+'

as a % of &P !"** 661"!* 66

1"+(

1"12 66 !"4 66

-!"*1 1+1$

)" a$italccontBalance6 11+2

,3%+& 7+7 ,77 1'+( ,$+' ,11%

,$+$ ,117

,(+2 (+7

as a % of &P !"9*!")*

1")4

-

!"41

!"3+

-!"+ 0+'$

i. Forei7n irectIn/estment '+(

237 %+%

1%(+7 1$+$ 0.4 ,7' 3+1 ,$( 3+% 17+(

ii. PortfolioIn/estment ,$+2

,1%& ,1+3 ,112 ,%+% -5.8 ,13(

,2+& ,27

,'+$ ,13+(

iii. E#ternalssistance 0+3%

$%+& 0+% 1$ 0+'% 0.9 7%+% 0+7 ,7+% 1+& 2+$%

i/. E#ternalommercialBorro8in7s 1+$

,7'+( 1+' ,$' 3+2 3.8

,37+' 1+1 ,77 $+( '+1

/. Banin7a$ital 1+'

,$(( 1+'

,&(+7 3+& -4.9 ,%&'

,%+$ ,1(3

,10+3 ,&+7

/i. on-residente$osits 0+'

,2'2 0+2%

,2(+' 1+0% 1.04 ,222 2+1 (%+(

3+1$ $+1(

/ii. :;ort Termredit 2+3

32+' 0+77 ,7' 3+07 -3.9 ,1(7

,%+$ ,'7

,(+3 ,&+23

/iii.


51/63

,- indicates Inc =5 indicates ec.

Major Items of India'sBalance of Payments US * -illi)n

ITEM Q1%&r Q2

%&r H1 Q3

%&r Q4

%&r H2

F!9

1" E#$orts 3'+7 ,21 $2+3 ,1$ '1$$+&

,13+%

%2+$ 31+% (7 17'

as a % of &P3"4( 66

3"*) 66

*"21

3")1 66

4"23 66

*"+4

1("!(

2" Im$orts &$+7,1(+% 7$+%

,$+(

13(+2

7%+3 ,$+(

'3+( %$

1%(+2

2('+$

as a % of &P

("*

) 66

)")

3 66

12"

39

)"!

9 66 )"* 66

12"

*9

2("

1+

3" Trade Balance ,1-2.

,2%+( ,17

,32+2 ,17

,%'+1

,30+7

,1&+7 ,32

11%+7

,&2+2

,120+3

as a % of &P

-2"31 66

-2"+) 66

-("1*

-2"4 66

-2"( 66 -4"9

-1!"!*

4" In/isi0les et 20+1 ,(+( 1(+% ,2% 3(+&1'+& ,2%

1'+% ,$ 37+1 7&+7

as a % of &P1"*9 66

1"*4 66

3"(3

1"(1 66

1"49 66 3

)"(3

(" rrent ccontBalance ,354 . ,%+'

,3%+&

,12+& 0+(

,1'+$ ,12 0+( ,13 ,37$ ,2% $3+&

as a % of &P

-!"(1 66

-1"12 66

-1")3

-9"* 66

1"!(

-+")(

-1!"2+

)" a$ital ccontBalance6 %+( ,$7

22+0$

1'3

27+($

13+7 1'3

1%+1 ,$$0 2'+'

%&+7$

as a % of &P!"(2 66

1"9) 66

2"4+ 1"1 66

1"22 66

2"32 4"+

i. Forei7n irectIn/estment &+'

,23+7 7+&

3&+' 1$+$ 3.9

3&+' 3+2 0+$7 7+1 21+%

ii. PortfolioIn/estment '+2 ,2(& (+&

,'3( 17+' 5.6

,'3( '+' ,$27 1$+$ 32+2

iii. E#ternalssistance

0+0'$ ,7& 0+$'

,%+(

0+%&$ 0.6 ,%+( 0+' 2+( 1+$

1+(&$

%1


52/63

i/. E#ternalommercialBorro8in7s ,0+3 ,12$ 1+1' ,3& 0+'' 1.6 ,3& 0+1 ,(1 1+7 2+%'

/. Banin7 a$ital ,%+1 ,37% 3+37 '0,1+73 1.9 '0 0+$ ,107 2+3 0+%7

/i. on-residente$osits 1+' 123 1+0$

30$ 2+'$ 0.6 30$ 0+& ,72 1+2 $+0$

/ii. :;ort Term redit,3+0' ,22( 0+'$ '+'

,2+2$ 3.2 '+' % ,1(1 '+2 %+(&

/iii.


53/63

?) Tra*e "alance- th& ta+& +&.c.t t"" ha *&&$ .$c&a.$ c"$ta$t#' *&ca4& " th&

.$c&a& .$ *"th .1,"t a$+ &


54/63

(" rrent ccont Balance,354 . ,(+' ,12+3 ,13+22 ,13+$

-4+"*2

as a % of &P ,0+73 ,0+(1 ,0+(' ,0+((

)" a$ital ccont Balance6 1%+(% 23+'3 1&+2( 1%+$ *1"4*

as a % of &P 2+3 3+3 2+1' 2+3 10+0'

i. Forei7n irect In/estment %+' 7+& 3+& 3+$ 20+$

ii. Portfolio In/estment '+3 10+3 %+' &+1 30+%

iii. E#ternal ssistance 0+$3 0+3& 0+7 0+& 2+0(i/. E#ternal ommercialBorro8in7s 0+21 1+32 1+3 0+% 3+33

/. Banin7 a$ital 0+23 2+&$ 1+% 0+7 %+07

/i. on-resident e$osits 0+'$ 0+3$ 0+' 0+$ 2+3'

/ii. :;ort Term redit 1+12 1+1& 3+& $+1 (+('

/iii.


55/63

+&1a$+: G&1 a$+ &7#&' . th& #a&t c"$t.*4t" (a"4$+ ) t" th& c"4$t'

t"ta# &


56/63

h"7&5&! 4,&& . #.8' t" ac& +"7$7a+ ,&4& +4& t" th& "$".$ 4$c&ta.$t' .$

th& .$t&$at."$a# 1a8&t:

) ;"t"#." .$5&t1&$t a$+ h"t t&1 c&+.t .$#"7 ha5& .$c&a&+ c"$.+&a*#' .$

th& Q@ FY0 a$+ a& &


57/63

I$ th& c4&$t c&$a." I$+.a &c&.5& &at& "&.$ &


58/63

O$ th& 7h"#& I$+.a FY0 B"; &ct a .$..ca$t .1,"5&1&$t "5& th& ,&5."4

'&a a$+ t&$th&$ "4 &


59/63

Trade deficit:-A#th"4h FY &


60/63

*""7.$! " ECB) a#" .1,"5&+! *4t th&& 7a a .1.#a #&5 " "4t#"7

+4& t" a #a& a1"4$t " 1at4.t.&: D&*t #"7 h"4#+ .$c&a& .$ FY a

#"*a# #.4.+.t' &1a.$ .$ 4,#4 a$+ .$t&&t at& a*.ta& .$c&a&: Wh.#&

h4& ECB-at&+ "4t#"7 a& a#" &


61/63

Th& c4&$t acc"4$t .t&1 a& h.h#' 5"#at.#& a$+ h&$c& "$#' th& "&.$ +.&ct

.$5&t1&$t a$+ th& ,"t"#." 1a$a&1&$t .t&1 7&& ,&+.ct&+ .$c& th&

1"$th#' a$+ th& +a.#' +ata 7a a5a.#a*#& "$ th& S.$c& "&cat.$ . a t',& " ,&+.ct."$ a$+ th& ,&+.ct&+ *", 1a' " 1a' $"t

c"1& t" *& t4& a th& 4t4& . 4$,&+.cta*#&! h&$c& I ca$$"t 4aa$t&& that

1' ,&+.ct."$ 7.## c"1& t4&:

Wh.#& ,&+.ct.$ 7& ha5& a41&+ that $" 7"#+ .$a$c.a# c.. #.8& th&

&c&."$ " th& '&a 200 7.## ta8& ,#ac&: Th. 1a' " 1a' $"t *& t4&:

$$< CONC-ION

Th& "&cat&+ *a#a$c& " ,a'1&$t h"7 h.h& .$#"7 "1 &


62/63

,a& *': Th& .$t&&t at& .$ th& c"4$t' 7.## &1a.$ #4cat.5& &$"4h t" attact

"&.$ .$5&t" a$+ h&$c& "&.$ c4&$c': Th& 7"#+ 7a c4&$t#' ac.$ th&

G&&8 +&*t c.. *&ca4& " 7h.ch th&& 7a a #"t " 4$c&ta.$t' .$ th& .$t&$at."$a#

1a8&t: I$+.a ha $"t *&&$ 14ch a&ct&+ *' th. c.. a$+ h&$c& t.## &1a.$ a

"7.$ &c"$"1' " .$5&t": Th& +, " I$+.a . ,&+.ct&+ t" "7 *' : "1

th& #at '&a:

St"$ ca,.ta# .$#"7 +4.$ th& &c"$+ ha# " FY 7.## t&$th&$ 4,&&

4th& t" @? ,& US +"##a *' Ma: I$ th& h"t 4$! h"7&5&! 4,&& . #.8' t"

ac& +"7$7a+ ,&4& +4& t" th& "$".$ 4$c&ta.$t' .$ th& .$t&$at."$a# 1a8&t:

=&&,.$ .$ 1.$+ th& "7th .$ I$+.a$ &c"$"1' a$+ th& c4&$t c&$a." I &


63/63

'< ...!r"i!org!in

,< ...!commerce!nic!in

5< #ress information "ureau >government of In*ia

Documents

Balace of Payment Forecasting and Currency Movements