by Pavas Gupta
In last week’s economic news, India saw some relief as auto-fuel prices dipped. On the other side of the world, Trump’s policies on China seem to be back-firing. Read on to know what you missed last week:
Fuel prices may ease in the next few days: Government official
As international oil prices decline, consumers of auto-fuel will fare better as petrol and diesel prices are also expected to fall. In the last eight days, international oil prices have fallen and the rupee has also appreciated.
“In line with these developments, retail prices of petrol and diesel in Delhi have come down to ₹80.85 per litre and ₹74.73 per litre respectively. This means, in the last one week, retail prices have registered a reduction of ₹1.98 per litre on petrol and ₹0.96 per litre on diesel,” a government official said.
“As per the assessment, the retail prices of petrol and diesel may reign easy in the next few days,” the official added.
By 2022, farmers’ incomes will double: Agriculture Minister
According to Union Agriculture Minister Radha Mohan Singh, the government has taken a number of steps to alleviate farmers’ woes. These include increasing import duty on various commodities, raising the Minimum Support Price (MSP), widening insurance cover, and investing magnanimously in farm mechanisation, irrigation and modernisation.
Singh believes these, and other steps, will at least double farmers’ incomes by 2022.
Movement of rupee, quarterly results, and global trend to drive stock markets this week
In the ongoing quarterly results season, macro-economic data announcements and movement of the rupee will determine the stock market trend, claim experts. Volatility in the global markets will also play a key role, they added.
“The market has been correcting in the last two months, and in the near-term, considering the technical factors, we are bound to see some relief. Earning season will gather pace in the coming months and as market participants will be keen on comparing consensus earnings with actual which will dictate the market momentum. If the global volatility continues, investors will be more focused on haven assets like gold and bonds,” said Vinod Nair, Head of Research at Geojit Financial Services.
RBI looking towards relaxing PCA framework
The Reserve Bank of India (RBI) may look towards relaxing its Prompt Corrective Action (PCA) framework, a senior government official claimed.
The above-quoted official added that the government also expects some lenders to come out of the PCA framework on their volition, after recent recoveries made through the bankruptcy process.
Presently, there are 11 banks under the RBI’s PCA framework and the minimum common equity (CET) Tier I ratio, as prescribed by the RBI, stands at 5.5% against 4.5% as dictated under Basal III norms.
Trade wars: China deficit shows America’s strength
United States President Donald Trump has made closing America’s trade deficit with China a top priority. Despite his efforts, the deficit seems to be growing. This comes as proof that Trump’s tariff-heavy, get-tough approach with China is counter-productive. For economists, this is not much of a concern as roaring economies, such as the US, tend to import more.
There is another reason that the trade balance is the wrong figure to focus on: it only partly captures the greater economic relationship between the US and China, and only as it currently stands. What ultimately figures in is US corporate competitiveness and profitability.
Pavas Gupta is a writing analyst at Qrius
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