Is India Prepared For U.S. Monetary Tightening Policy?

BANGALORE: Many markets are slowly emerging for either the first time or again, since the crash and slow global economic growth since 2008. Well these emerging economies are in for another scare due America’s second quarter monetary tightening, which will see the rise in rates across business.

Economies are the globe are preparing for this hike which could very well affect their economic stability again but as for India, it stands ready for the change and here is why as per Economic Times Reports.

Exports on the rise: As per India Ratings’ report India’s exports stood at 10.2 percent at the end of June 2014. This stand is a great increase from previous years and is a sign future export growth. This is a revival of exports as stability is slowly backed at the Eurozone and the rise of U.S. consumer demand.

The reports also show that the percentages of imports have decrease a bit and this will only lead to a stronger economic balance with more exports and less imports. Also as the U.S. economy is picking up its pace this is a good sign for India’s future growth in exports.

High FOREX Reserve: India’s FOREX reserve was said to have depleted in the last years but this year witnessed an all time high. The foreign Exchange Reserve increased to 17464 Billion in July of 2014 from 17357.90 Billion in June of 2014.

This foreign exchange reserves are held by the central bank and are reserves made in the form of Gold or specific foreign currencies. India is stable with the amount of FOREX reserve it has.

FDI Bliss: The new budget had eased the flow of FDI into the country with certain sectors gaining huge margins like defense. This will automatically allow the flow of foreign fund for the country. 

Also Read:
10 Products That Continue To Rule Indian Hearts
India Inc Needs To Focus More On Collaboration: Ratan Tata