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Screenshot of a breaking news alert e-mail from Q2 2017
TradeNext, the Indian owned, London based FX and CFD broker is reducing its spread on the US dollar and Indian rupee pair by 5%.
The move comes after the Central Bank reduced interest rates for the third time this year earlier this month, to 7.25% from 7.5%.
Mohsin Jameel, CEO of TradeNext said: “Our decision to reduce our USD/Rupee rate is as a result of increased volumes and greater volatility we have seen over recent weeks in the emerging markets, especially in India as the nation’s economy continues to swing like a pendulum.”
“The rate cut is seen as a pre-emptive move to try and avoid Inflation falling further within the 2-6% C.B. target range, as Consumer’s are seen losing confidence with the economy” he continued.
“Along with the low capacity utilisation within the economy, the rate cut is hoped to help stimulate investment within the economy. The RBI will watch factors affecting inflation, especially food, for the rest of the year as a wait and see period on rates is expected from the Central Bank” stated Mr. Jameel.
It is over a year since Narendra Modi came to power yet Tradenext has stated that many have criticised Modi for only making cosmetic policy changes, although the numbers indicate toward a different story, for example:
· Industrial Production was at -0.1% in 2012-2014, now it is at 2.8%.
· Growth in Electricity generation has increased to 8.4% compared to just 6% in 2013-2014.
· India has benefitted from a 13% rise in Forex reserves compared to May 2014, up to 352.1 Billion.
· FDI inflows have risen by 39% to $28 813 Million to keep India at the forefront of BRIC nations to attract foreign companies.
· The Indian government has curbed WPI Inflation which was rampant at 5.55% in April 2014, but now stands at -2.65% in April 2015. CPI inflation is also significantly lower, falling to 4.87% from 8.48%.
· The government has used rate cuts and subsidies to help reduce the prices of basic household items, overall food and beverage inflation fell to 5.36% from 9.89% a year earlier.
Mr. Jameel concluded: “These statistics may seem paltry, however India is changing for the better. And, of course this is only year one and much of his agenda is still evolving but progress is the key word as some improvement has definitely been made.”