BSE & NSE's foray in Commodity Derivatives, Government seen curbing non-essential imports & India to pay in Rupees for Iranian oil from November

15th Sept – 21st Sept

1. RBI sold Treasury bonds worth $14.4 billion between April-July 2018

September 21, 2018

As per the report from US Treasury Department, RBI sold the US treasury bonds worth $14.4 billion between April and July this year. RBI bought 0.41 million troy ounce of gold (roughly 12.75 tonnes), as per data reported to IMF. It appears that RBI is swapping its stock of US T-Bills with gold

Source: Economic Times

2. Iran Oil imports to be paid in Indian Rupee

September 21, 2018

India is looking to make payment in Indian rupee towards Iranian oil imports as US sanctions are looming from Nov 4 this year. India may prefer UCO Bank and IDBI Bank, which have no exposure to the US Financial system. UCO Bank is preferred due to prior experience of similar system in 2015 US sanctions against Iran.

Source: Economic Times

3. NSE-BSE to do mock trading on Saturday to launch Commodity Derivatives

September 21, 2018

NSE and BSE got formal approval from SEBI to launch non-agri commodities derivatives on their platform from Oct.1. NSE-BSE have kept a mock trading session this Saturday to test the technical feasibility of the system

Source: Economic Times

4. President Trump tweeted and urged OPEC to reduce oil prices

September 21, 2018

President Trump urged OPEC nations to reduce oil prices as Brent oil is approaching $80 per barrel. He resumed his criticism of OPEC, saying on Twitter that the cartel “must get prices down now!”

Source: Business Standard

5. Gold Monetization Scheme - focus on Govt. bid to curb imports

September 20, 2018

The Finance Ministry may raise issuances of sovereign gold bonds and tweak features to shift a portion of investment demand to “paper gold” to trim physical purchases; increasing import duty is not seen as a permanent solution to decrease imports.

Source: Financial Express

6. FPI allowed to trade hedge in commodity markets

September 19, 2018

SEBI decided to allow FPI to hedge into Indian commodities market; this decision was taken after discussing with RBI and the Finance Ministry. However they will not be allowed to take exposure in sensitive commodities and also they cannot over and above their physical market holdings. Sugar, Pulses are ruled out but FPI will be attacked towards Cotton, edible oil, guar gum and spices.

Source: Business Standard

7. Gold import duty can be hiked to address CAD

September 18, 2018

The Government may increase import duty on gold from 10% to 12%-13% as Current Account Deficit (CAD) keeps widening. Besides the option of increasing import duty, the government is also considering some policy measures to restrict gold imports.

Source: Business Line

8. Govt. may curb import of “Non-essential” goods to address CAD

September 17, 2018

Government may stop or reduce imports of non essential goods to address the widening Current Account gap. The Current Account Deficit at 2.8% of GDP in 2018-19 with oil at $72.5 per barrel and at 3.2% with oil at $80. It’s no wonder then that the rupee has been hammered. Government may reduce the imports of Car, Gold, Liquor and other non essential goods to curb CAD.

Source: Live Mint