India

The Daily Update - Renminbi

This week the US Department of the Treasury issued a report to Congress on Foreign Exchange Policies of Major Trading Partners of the United States. Bilateral trade imbalances are a key concern for this US administration and the report monitors ‘where unfair currency practices may be emerging and encouraging policies and reforms to address large external surpluses’.

The Treasury looks at 3 criteria in compiling a ‘Monitoring List of major trading partners that merit close attention to their currency practices’:

The Daily Update - World demographics

According to the recently issued United Nations demographic projections the world’s population will reach 11.2 billion by 2100, a figure that although is largely unchanged from its estimate two years ago, is still startling. In the next decade alone the world’s population will age at an astonishing rate with the number of people over the age of 65 rising by 38%, that’s 250 million more, meaning that we will go from the current rate of 7.5 workers per pensioner to just 6.

The Daily Update - Modi's shadow

In an attempt to flush out India’s black money and line tax coffers, three weeks ago Prime Minister Narendra Modi declared 500 and 1000 rupee notes “will no longer be legal tender… just worthless pieces of paper”; despite the two major notes accounting for ~86% of rupees in circulation. In a shock televised announcement, Modi said he would give the public - who use cash for ~98% of all transactions (in volume terms) - ‘50 days to deposit notes of Rs 500 and Rs 1000 in any bank or Post office’. According to sources, roughly $100bn of the estimated $220bn of banned high denominated notes have been declared so far.

Wealthy Nations Daily Update - India, Monsoon and Relative Value

After two years of El Nino drought, the India Meteorological Department (IMD) has predicted that this year’s monsoon will be fruitful, saying last week that precipitation between June and September will be ~106% of the long-term average. However, over the last 20 years, the IMD have only successfully predicted the chance of rainfall on 5 occasions. With over half of the labour force employed within the the agriculture sector and around 60% of the nation’s farmland reliant on rainfall, these predictions are hugely important. Poor rainfall and extended drought have devastating effects on agricultural production and thus a disproportionate effect on the poor.

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