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Negative Oil Prices

Suppose you are a trader in Future Market and deals in Exchange Trade Commodity. Now due to uncertainty in market, demand for that good fell and there will be physical delivery of that good once the trading window is closed. With “constrained storage capacity” and few days for the trading window to close, what will you do as a trader? Will you trade those futures at any price (+ve or -ve) possible or Will you take the delivery and store it where the cost of storage is higher than the gains from future contract? INTRODUCTION :  US benchmark West Texas Intermediate (WTI) for May  delivery traded with $-4.29 on 20 th April and ended  trading at -$37.63 a barrel on NYMEX ahead of 21st April  close (lost 306% to settle) for futures contracts and expired  at $10.01 a barrel, although Brent Crude and other  benchmarks were in positive radar.  U.S. oil’s June contract drops over 43% to 21year low.  Overall, the energy sector is forecasted by Global Data ...

Speculations on Excess Indian Forex Reserves

India's total foreign exchange (Forex) reserves stand at around US$572.771 Billion on 13 November 2020, the highest ever, the USD-INR exchange rate is USD1 = Rs.73.82 as of 26 November 2020 up from Rs.75. The RBI has also commented that “the recent appreciation of the rupee is working towards containing imported inflationary pressures". The forex reserve, the exchange rate, and RBI’s comment has raised important questions: are the growing currency reserves a sign of a healthy external balance? How are these reserves deployed currently, and could India use them more effectively to achieve growth and prosperity? Finally, with so much reserves, should we now let the rupee appreciate so that inflation softens and our wealth increases?  India over the years has been a consumption-based economy with a Balance of Trade deficit. In COVID-19 times, there has been a huge surplus in the Current Account but are not sustainable in nature. In recent quarters India has managed to keep its BO...