20 Lakh Crore Package Helps Rupee Hike Against USD

The 20 Lakh Crore package for economic relief announced by PM Narendra Modi uplifted the sentiments of forex investors. After trading between an intraday high of 75.30 and low of 75.50, Rupee closed at 75.46 against US Dollar. Rupee appreciated by 5 paise against USD. The weakening of US currency overseas also impacted USD.

The detailed report presented by Finance Minister Nirmala Sitharaman may further boost forex investors’ sentiments helping INR gain against the US Dollar.

Crude Oil Prices to face Downfall

Brent Crude oil settled low after gaining around 1.2% on Tuesday. It fell by 1.9% at USD 29.42 per barrel. While US WTI tanked by 0.9% to close at USD 25.55 after increasing by around 6.8% in the last session.

The new wave of Coronavirus cases in China and South Korea created tensions globally resulting in oil price fall. Oil production cuts by OPEC+ and Saudi Arabia may not help the crude oil prices. As decreasing oil demand and increasing piles of stock across the globe.

Gold Prices Witness Worries

Gold prices marked a downfall today as PM announced the 20 lakh Crore economic relief package. The stimulus package equals to 10% of India’s GDP would help the economy and businesses fight the lockdown hardships.

Gold futures saw a dip of 0.19% to INR 45538 per 10 grams. Spot gold increased by 0.1% to a total of USD 1704.23 an ounce. Also, US Gold futures rose by 0.1% to USD 1708.10.

Besides, the rising cases and 2nd wave of Coronavirus cases created an unfavourable environment for investors around the world.

The Main Points Covered in the Speech of Finance Minister Nirmala Sitharaman:

  • On Tuesday, PM Modi addressed India to be self-reliant in Coronavirus phase announcing a relief package of 20 lakh crore worth 10% of India’s GDP.
  • Since lockdown, 41 crore Jan Dhan account holders have received around INR 18000 crores worth of grains.
  • INR 3 lakh crores collateral-free loan to be provided to MSMEs.
  • Funds of Fund 50,000 crore equity investment to potential and viable MSMEs.
  • INR 20000 crores of equity support and subordinate debt to MSMEs working under pressure and stress in this time of crisis.
  • No Global Government procurement tenders below INR 200 crores. This initiative to make India self-reliant and help small companies.
  • The government provided EPF support to businesses and workers since lockdown and now extending for more 3 months. A total of INR 2500 crores benefit to support employees and employers.
  • A liquidity fund of INR 90000 Crores for Discoms situated in different states to fight their cash flow problems.
  • An investment of INR 30000 crores will be made in the primary and secondary market through NBFCs, HCFCs and MFIs.
  • Extension of 6 months to contractors by central government agencies.
  • For providing relief to taxpayers, Due date to file ITR for the year 2019-2020 has been extended to November 30, 2020.
  • TDS and TCS rates being reduced by 25% till March 31 2021. With this reduction in tax rates, 50000 Crores liquidity generated to companies.
  • The payment for Vivad se Vishwas scheme extended to December 31 2020.

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