Happy New Year 2023
The year 2022 has ended and it is a matter of relief. For past many years end of year comes with the relief that it is over but unfortunately that is not happening. The recent developments in China shows that the pandemic may not be over as yet even though in India, it is almost normal now. Let’s look back at the year 2022.
During the year, the Reserve Bank of India has added 65.11 tonnes of gold to its pile. This is the highest purchase in a single fiscal year, second only to the 200 tonnes of gold bought in FY10 from the International Monetary Fund (IMF). It is seen as an attempt to diversify away from US dollar. RBI has launched Digital Rupee and as also started International trade in Rupee, starting with Russia and Sri Lanka.
While inflation in India is at modest 6%, the entire world has experienced inflation in double digit something the western economies have not seen for several decades. Rapid increase in repo rate by Central Banks did not prove very effective in controlling inflation but it may cause recession. We have to wait to see if it happens and its domino effect on the world. If Pandemic was the cause for the economic turmoil, Ukraine war acted as a booster to the problems.