Vladimir vladimirovich putin, President of Russia

Mumbai, Aug 11 Many countries across the globe has been surreptitiously searching for non traditional payment and settlement mechanisms that points to 'Dollar Distancing' finally happening.Meanwhile, an interesting development is taking place in the global currency market. There has been a significant jump in the demand for Yuan arising from short-circuiting the sanctions in place by corporates in select jurisdictions who have been utilizing multitude of non-dollar currencies to procure crude and other commodities viz. coal through striking deals in Renminbi/HKD/AED pairs at discounted rates, SBI Ecowrap report said.On a related note, on August 5, Turkish President Recep Tayyip Erdogan announced that one of the key takeaways from his meeting with Russian President Vladimir Putin in Sochi was bilateral agreement to use Rouble as a monetary unit in trade. The high level talks touched upon gas exports to Turkey with both Central Banks agreeing to partially pay for them in Roubles, and that Russia and Turkey were moving forward to a gradual transition to paying in national currencies only.Russian-Turkey bilateral trade is currently running at about $23.5 billion with both sides committing to increasing this to $100 billion by 2030. With China vowing to anchor the bonhomie with Russia, there seems a certainty that 'Dollar Distancing' could be a reality in coming days.Similarly, according to some media reports, Indian companies are also using Asian currencies more often to pay for Russian coal imports. India has been aggressively purchasing coal and oil from Russia since the beginning of Russia-Ukraine war, which allowed then to procure this items at lower cost.The local currency which was under pressure last month has seen appreciating in last few days after FII inflows turned positive since July-end pouring in $3.3 billion into the country. Notably, FII inflows remained in the negative territory for 9 months since October 2021 and only reversed in July.Oil has also moved down below $100/bbl and moving around $96/bbl after the increase in US stockpiles indicated low demand.On the external data front, the recent trade deficit data shows an increase to record high in July 2022, annualizing the current deficit numbers gives annual deficit of 8.5 per cent of our GDP projections for FY23 which is much lower than the peak deficit of 10.7 per cent of GDP achieved in FY13. Thus, the current situation is much better than that in 2012-13. Moreover, the market has already priced in higher CAD i.e. higher than 3 per cent of GDP for FY23.On the inflation front, going forward, SBI Ecowrap report expect inflation trajectory for India to be benign. CPI numbers for March 23 could be even lower than 5 per cent, if July CPI numbers are closer to 6.5 per cent-6.6 per cent, a likely possibility."We believe inflation in FY23 is likely to come around 6.4-6.5 per cent (below RBI projection of 6.7 per cent) with inflation moving below 6 per cent only in November 22. For FY24, it should come at 4.8 per cent," the report said.Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor

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Vladimir vladimirovich putin, Latest News

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