Switzerland’s “anyone can initiate a referendum if they’ve got enough signatures” society gets to vote on the “Save our Swiss gold” proposal this Sunday, which aims to make it compulsory for the Swiss Central Bank to hold at least 20 per cent of its assets in gold bullion and repatriate all Swiss gold that’s held abroad.
The proposal also plans to make it illegal for the SNB to sell any of the gold it accumulates. Ever.
What’s worth noting ahead of the poll, though, is how the naturally occurring phenomenon of “too many non-productive gold assets in our economy” has struck economies in the past. Read more
Turkey-like policy action is hypothetical, I would not venture there.
– Raghuram Rajan, RBI governor, Jan 29th. We’re assuming he meant he wouldn’t touch the hypothetical…
Anyway, this is how Citi’s David Lubin explains the rupee’s recent fortitude
already battered position and, perhaps, Rajan’s aggresive attitude to the Fed’s tapering: Read more
And on silent feet they… moved towards price stability with CPI inflation as the new nominal anchor.
The RBI’s report on how to revise and strengthen its monetary policy framework to make it more “transparent and predictable” may play a very large role in the regime change underway at the Reserve Bank of India. Admittedly, the report isn’t out until later in the month but considering the useful Stanley Fischer news hook, it seems rude not to mention Rajan’s potential to also labour to reduce the powers of the ofﬁce he holds, for the institution’s sake. Particularly when the institution and the country it resides in still lack a whole lot of maturity. Read more
The Indian government’s efforts to support the rupee seem, for now, to have worked:
To be added to the growing collection of central bank educational tools… Frankly, this isn’t a patch on the ECB’s Top Floor or the BoE’s Monetary Policy Balloon (and I won’t even bother comparing it to Inflation Island, a giant of the genre) but, tbf, the RBI probably has less resources to throw at its gaming division.
Or, the line between a pretty standard EM problem and those of a uniquely enormous democracy heading into an election which happens to suffer from many of those standard EM issues.
First, the negative loopiness from Goldman’s Tushar Poddar: Read more
The Indian rupee’s plunge continues.
As the FT reported on Wednesday, consensus opinion is that the weakness is connected to India’s growing current account deficit and unimpressive attempts thus far to bring it back to reasonable levels.
But Bloomberg on Wednesday alluded to another interesting connection: India’s attempts to suppress gold consumption. Read more
If you were wondering how fears over policy ‘credibility’ could send the Sensex in such a spin on Friday — India’s benchmark closed down almost 4 per cent — and trash the rupee…
Here’s an illuminating chart from Nomura: Read more
Right, we’ve had a few looks at India over the last while — at its crumbling rupee, widely reported deficits and stumbling, ineffective political system. Heck, Standards & Poor’s even got in on the act and prompted us to ask if the Brics are about to become the Brcs.
That all makes Monday’s decision to keep rates on hold by the Reserve Bank of India a bit more suprising than it might otherwise have been. From the RBI’s statement (our emphasis): Read more
“Bas! Bas!” is surely a familiar cry in the Reserve Bank of India right now as India’s rupee continues to plummet. So far, it has dropped 15 per cent against the US dollar since the start of February, hitting multiple new record lows on its way.
The central bank has attempted to get inventive in response but nothing seems to be stopping the slide (metaphorically speaking, in the chart, the higher it gets the weaker the rupee): Read more
Keeping up with currency wars can be a busy business.
It’s time, therefore, to give our already extensive intervention list, originally compiled on September 28, an update. And check out the emerging market entrants. Read more