Current Affairs of 9th January

1.RBI to Auction Green Bonds in 2 Tranches 8000cr each in Jan and Feb

In two parts, the Reserve Bank of India (RBI) will auction 16,000 crore rupees worth of sovereign green bonds (SGrBs). On January 25 and February 9, respectively, the RBI will hold an identical price auction for 5-year and 10-year green bonds with a combined value of 4,000 crore rupees.

 

Projects in the Public Sector Come First:

 

The funds will be put toward projects in the public sector that aid in lowering the economy’s carbon intensity. Sovereign Green Bonds will be issued by the central government as part of its overall market borrowings in order to mobilize resources for green infrastructure, as stated in the Union Budget 2022-23.

 

Green Bonds: What are they?

 

Companies, nations, and multilateral organizations issue green bonds to provide investors with fixed-income payments and exclusively fund projects that benefit the environment or the climate.

 

Renewable energy, clean transportation, and eco-friendly buildings are among the possibilities for the projects.

 

These bonds will be used to fund green projects. This is not the case with standard bonds, whose proceeds can be used for any purpose the issuer chooses.

 

Since its inception in 2007, the international market for green bonds has seen issuance totaling more than USD 1 trillion.

 

According to the London-based Climate Bonds Initiative, 24 national governments had issued sovereign green, social, and sustainability bonds worth a total of USD 111 billion by the end of 2020.

 

What Impact Does the Sovereign Guarantee Have on Green Bonds?

Governments and regulators receive a powerful signal of intent regarding climate action and sustainable development from sovereign green issuance.

It will encourage institutional investors and spur development of the domestic market.

It will support the expansion of a local market by providing benchmark pricing, liquidity, and a demonstration effect for local issuers.

 

The Green Bonds’ Intention:

In the Budget for 2022, the Finance Minister made the announcement that the government intends to raise funds for green infrastructure by issuing sovereign green bonds.

 

The funds will be put toward public sector initiatives that aid in lowering the economy’s carbon intensity.

India’s commitment to achieving net-zero carbon emissions by 2070 is in line with the announcement.

 

2.Former West Bengal Governor Keshri Nath Tripathi passes away.

Keshari Nath Tripathi passed away at the age of 88. He was a senior leader of the Bharatiya Janata Party (BJP) and a former governor of West Bengal. Tripathi was also a senior advocate at the Allahabad High Court. He was born on November 10, 1934, in the former Allahabad. When he was just 12 years old, he joined RSS and later joined the Bharatiya Jana Sangh. In 1953, he was imprisoned for his participation in the “Kashmir Andolan,” and in 1990, he was imprisoned for his participation in the Ram Janmabhoomi movement.

 

The Keshari Nath Tripathi character:

 

Tripathi, a senior advocate at the Allahabad high court, was a six-time UP Legislative Assembly member. He served five consecutive terms in the Allahabad South seat from 1989 to 2007 and the Jhunsi seat from 1977 to 1980. Between 1991 and 2004, he also held the position of Speaker of the UP Legislative Assembly three times.

 

Tripathi was given the job of governor of West Bengal on July 14, 2014. He was governor of Meghalaya and Mizoram in addition to having additional charge twice as governor of Bihar.

Tripathi was an active leader who was admired by everyone in the BJP. In 1977, he was elected MLA from the Prayagraj district’s Jhunsi assembly constituency. He went on to win six more elections for the Assembly, his last one coming from the Allahabad South seat in 2002. He also ran for Assembly in 2007 and 2012, but both times he lost.

 

3. $562.9 billion in forex reserves; reduce by $70 billion in 2022.

According to data released by the Reserve Bank of India (RBI), India’s foreign exchange reserves decreased by $70.1 billion in 2022. In the week that ended on December 30, the foreign exchange reserves were $562.9 billion. The RBI’s intervention in the currency markets to prevent volatility and the depreciation of other major currencies held by the central bank account for part of the decline in forex reserves. Union finance minister Nirmala Sitharaman stated that the RBI had net sales of $33.42 billion through September. The RBI’s reserves, which are expressed in US dollars, include major currencies like the pound sterling, the yen, and the euro.

 

The annual decline of the rupee:

 

In the year 2022, the rupee lost 10.2% against the US dollar.

In September, the rupee exceeded 80 against the dollar and has remained at Rs 81-82 levels ever since.

Until March, it is likely that the rupee will trade in the 81-83 range against the dollar.

The forex reserves and forward cover will help to ensure that the rupee remains range-bound in 2023, when it is anticipated that the Indian currency will remain between 80 and 83.

 

A Coverage to Reduce Imports:

 

In September of 2021, forex reserves reached a high of $642.5 billion, but by the beginning of February 2022, when the Ukraine-Russia war began, they had fallen to approximately $631.5 billion. As of December 9, RBI had stated that FX reserves of $564.1 billion were less than the anticipated 15 months’ worth of imports at peak levels.

 

An Additional Negative Trend:

 

Analysts predict that the rupee could surpass 83 levels if the US Federal Reserve maintains its hawkish stance on interest rates. The rupee will continue to be under pressure from crude oil and other commodity imports on the trade front.

 

Due to RBI intervention, the rupee has been more resilient than its peers in other emerging markets despite its slide. However, the foreign exchange reserves have been significantly depleted as a result. According to the data, the forex reserves saw gained slightly by $44 million in the week that ended on December 30.

 

The increase was primarily caused by an increase of $354 million in gold reserves, which were offset by a $302 million decrease in foreign currency assets. As of September 30, the RBI held 785.35 metric tons of gold.