India's FX reserves to rise for latest week despite RBI support, swap maturity, economists say
A $5 billion dollar/rupee swap by the RBI matured that week, with bankers saying the central bank delivered the swap, a move that is a drain on reserves.
Further, the RBI intervened in both the onshore spot and non-deliverable forward markets that week to prevent the rupee from slipping past its all-time low of 87.95 after U.S. President Donald Trump imposed additional tariffs on Indian goods over the country's purchase of Russian oil.
This drain on reserves was balanced out by revaluation effects, economists said.
"The rise in FX reserves was fuelled by a revaluation boost of $9.8 billion, reflecting higher gold prices and a weaker dollar," said Gaura Sen Gupta, economist at IDFC First Bank.
She estimated that India's reserves rose by more than $4 billion during the week.
The official figures will be released on Friday.
When RBI sells dollar in the spot market to support the rupee it directly reduces FX reserves, while NDF interventions influence offshore sentiment without an immediate reserves impact.
The net dollar selling by RBI in that week was $5.6 billion, which includes maturity of $5 billion swap, Sen Gupta said, which she noted implied spot intervention in the week was less and that the RBI would have relied on NDF.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Reuters
an hour ago
- Reuters
US sues California to block tough emissions standards for trucks
Aug 15 (Reuters) - The U.S. government said on Friday it sued Californiato stop the state from enforcing stringent emissions standards for heavy-duty trucks that President Donald Trump recently declared void. In complaints filed this week in two federal courts, the U.S. Department of Justice said federal law preempts the California Air Resources Board from enforcing various emissions rules governing heavy-duty trucks and engines. These include the Clean Truck Partnership, a 2023 initiative with manufacturers designed to advance California's goal of lowering emissions, while giving the truckmaking industry flexibility to meet emissions requirements. The Justice Department sued after a House of Representatives committee said it recently learned that staff at the California Air Resources Board won't let auto manufacturers bring vehicles to market unless they comply with California's preempted standards. "This ongoing defiance of federal law must stop," the department said. California's rules governing light-duty vehicles are also preempted, the department added. The California Air Resources Board declined to comment, while the office of California's Governor Gavin Newsom did not immediately respond to requests for comment. Newsom, a Democrat, has long promoted tough emission standards, as well as the sale of electric vehicles, to help fight climate change. California has long had power under the federal Clean Air Act to set tighter pollution limits than federal law requires, and received more than 100 waivers under that law since 1970. But the Justice Department said the Republican Trump's signing in June of congressional resolutions curbs California's power, including by voiding a waiver allowing the Clean Truck Partnership. "President Donald Trump and Congress have invalidated the Clean Air Act waivers that were the basis for California's actions," said Adam Gustafson, acting assistant attorney general for the Justice Department's environment and natural resources division. "CARB must respect the democratic process." The new lawsuits are intended to help Trump end California's push for electric vehicles, level the regulatory playing field and promote consumer choice, the department added. Both lawsuits were filed as motions to intervene in existing federal cases challenging California's emissions standards, including the Clean Truck Partnership. One case was filed on Monday in Sacramento, California by four large truck makers--Daimler ( opens new tab, International Motors ( opens new tab, Paccar and Volvo ( opens new tab. The other was filed in December in Rockford, Illinois by the American Free Enterprise Chamber of Commerce.
Reuters
an hour ago
- Reuters
Democrats decry move by Pentagon to pause $800 million in nearly done software projects
WASHINGTON, Aug 15 (Reuters) - Democrats took aim at the Trump administration after Reuters reported on Wednesday that the Navy and Air Force were poised to cancel nearly completed software projects worth over $800 million. The reason for the move was an effort by some officials at the services to steer new projects to companies like Salesforce (CRM.N), opens new tab and Palantir (PLTR.O), opens new tab, in what could amount to a costly do-over. 'The Pentagon has yet to show that it had a good reason for halting these contracts in the last inning and scrapping work American tax dollars have already paid for," Democratic Senator Tim Kaine said in an emailed statement. "If it can't show its homework, then this announcement - just days after Palantir's CEO spoke at Mike Johnson's Wyoming donor retreat - reeks of corruption.' Punchbowl reported earlier this month that Palantir CEO Alex Karp planned to address Republican House Speaker Mike Johnson's annual big-donor retreat in Jackson Hole, Wyoming. The Pentagon and Air Force did not immediately respond to requests for comment. The Navy declined to comment. Trump officials say the administration is striving to make the contracting process more efficient. Trump took office vowing to rid the government of what he calls waste and abuse. The website of the Department of Government Efficiency, the agency he created to spearhead those efforts, lists over $14 billion in Defense Department contracts it claims to have canceled. But seven months into his presidency, some of his own actions have complicated DOGE's work, from firing the Pentagon's inspector general to issuing an executive order prioritizing speed and risk-taking in defense acquisitions. 'If you're serious about cracking down on waste, fraud, and abuse, the last thing you'd do is cancel $800 million in projects that are nearly ready to roll out just to turn around and steer the same work to corporations of your choosing," said Democratic Representative Maggie Goodlander, who sits on the House Armed Services Committee and served as an intelligence officer in the United States Navy Reserve for over a decade. "This maneuver is an insult to taxpayers and servicemembers across America," she added. Salud Carbajal, another House Democrat who sits on the House Armed Services Committee, said the behavior was part of a pattern of waste at the Pentagon under Trump. 'I understand that our military's acquisition and procurement processes aren't flawless, but this administration has repeatedly shown a blatant disregard for the responsible use of taxpayer dollars,' said Carbajal. 'From lavish military parades to unnecessary troop deployments in Los Angeles, President Trump has used our armed forces to inflate his own ego and enrich his allies," he said, adding that he would continue to call out mismanagement and press for accountability.
The Guardian
an hour ago
- The Guardian
At 23, she set out to modernize the spice trade. Now she's navigating Trump's tariffs
In 2016, turmeric lattes were all the rage, but Sana Javeri Kadri thought the ones in San Francisco, where she lives, tasted nothing like the fresh spices she grew up with in India. A former line cook who was doing marketing for a Bay Area grocer, Javeri Kadri 'knew [her] way around spices', but was new to the industry. Still, she booked a ticket home to Mumbai, hoping that she could get richer flavors into US pantries. After reaching out to a number of growers, she met an organic turmeric farmer and, using her tax refund and a loan from her parents, bought a batch of the crop. It became the foundation of Diaspora Co, which Javeri Kadri launched the following year at just 23. From the outset, Javeri Kadri aimed to bypass industrial spice farms, whose products she found bland, and instead source from farmers using regenerative practices. This meant working directly with the producers and paying them a living wage. 'By rough math, I probably reached out to around 2,500 farmers,' she said. After two years of growing a US market for her turmeric, Javeri Kadri added black pepper to the mix. For a while after that, it was an 'exponential growth curve', she said. Today Diaspora Co has 24 employees and sells around 40 different spices and blends, sourced from 140 different farms in India and Sri Lanka. Diaspora Co is part of a wave of new spice companies, including Burlap & Barrel and Spicewalla, that center sourcing from sustainable farms, paying producers a living wage, building a more transparent (and streamlined) supply chain – steps they say allow them to put noticeably fresher spices on the market. Javeri Kadri said it was common knowledge in the industry that because of the long supply chains, it can take years for spices to reach consumers, meaning they are 'expired before they even get to you'. She said Diaspora Co farmers rotate their crops, maintain plant diversity and use water-retention systems – regenerative practices that not only minimize the farms' carbon footprint, but also make them more resilient to climate shocks. That meant when extreme flooding struck Tamil Nadu, India, last year, Diaspora's cardamom farm 'had such great aerated soil and such good irrigation, they were only in standing water for a few hours before the soil and the property was able to flush itself clean', minimizing losses, she said. Javeri Kadri stressed that her partners were already practicing sustainable agriculture before she arrived on the scene, but she connects them with each other. 'If you get them talking, they problem-solve themselves,' she said. 'They're all experts.' Diaspora Co enjoys low worker turnover and lasting partnerships, something Javeri Kadri attributes to the company's commitment to fair wages. 'Once we build a relationship with them, it never goes anywhere,' she said. In 2022, Diaspora Co launched a fund for farm workers, offering financial literacy workshops and providing seed money to open bank accounts, among other things. At a cardamom farm, workers asked for a community room and kitchen, which Javeri Kadri admitted wasn't what she expected. But 'it's what they need, not what we think sitting in America that they need,' she said. 'Really the point of it is that we listen to the workers directly.' Franco Fubini, a Diaspora Co board member and founder and CEO of sustainable food sourcing platform Natoora, said Javeri Kadri wasn't just 'trading spices', she was building a unique supply chain and helping to catalyze demand for products that 'are created in harmony with nature'. He added: 'Whenever you have a company that is creating a market by stimulating demand, buying the right product, paying the right price for it, and creating a healthy farming ecosystem – that is what revolutionizing the food system is all about.' Diaspora's efforts to, as Javeri Kadri puts it, 'decolonize the spice trade' have also proven profitable. She's raised about $2.5m from angel investors in the last few years, and though she declined to share revenue numbers, she said the company had grown twentyfold over the past five years. Its spices are now sold in 400 US stores, and last year, with help from Natoora, Diaspora Co expanded into the UK. Rather than pressuring existing partners to produce more and more, which could tax the land (and workers), Javeri Kadri said she plans to keep adding new farm partners in order to continue to boost production. Javeri Kadri has other projects on the horizon, including a new Masala Chai tea blend, another blend developed with the former Top Chef host Padma Lakshmi, and a cookbook featuring recipes from partner farms. 'A lot of people tell me, 'Oh, Indian food is intimidating or heavy or complicated,' and the whole premise of the book is, how do we make it as bright and fresh and accessible as possible?' Javeri Kadri said. She plans to roll out these projects while managing an altogether new challenge: This month, Donald Trump said he would raise tariffs on Indian products to 50%, a move that Javeri Kadri predicts will cost her company between $100,000 and $200,000 by the end of the year, leaving her no choice but to eventually raise prices. (She said they had already paid about $20,000 in tariffs since April, when the US imposed its initial levies.) Javeri Kadri's entire business model is built on sourcing spices from the areas they are indigenous to in south Asia, which means she couldn't pivot her supply chain even if she wanted to. 'People will say, 'Well, we don't need those exotic ingredients anyway,'' she said. But, she added, 'there's nothing as American as apple pie. And apple pie relies on cinnamon. An American classic is vanilla ice cream; we don't grow vanilla. A lot of these ingredients are inherently not exotic, but they come from elsewhere.' Tariffs could have an especially devastating effect on mission-driven companies like Diaspora, which operate on small margins even as they prioritize single-source farms and fair labor, said David Ortega, the Noel W Stuckman chair in food economics and policy at Michigan State University. 'These tariff price increases can really jeopardize those priorities.' With the higher tariffs – and the economic uncertainty surrounding trade policy – Javeri Kadri acknowledges that it may be hard to grow in the US market over the coming years. Her approach? 'We grow elsewhere. We go where we're not penalized for doing business,' she said. 'It's very simple.'
