De Dollarization is happening at a Stunning Pace. India's move so far !!!!!

The exercise of de-dollarisation, which was primarily on the drawing board for decades, is now taking wings. The process  has  accelerated following the  onset of the Russo-Ukrainian war and the subsequent, unprecedented sanctions against Russia. Almost surely the principal factor driving countries to move away from the current global financial system is, the U.S. government’s ability and ever-increasing willingness to weaponize the dollar against its political adversaries and those who refuse to go along with its political program.

The establishment of an alternative global banking system by other countries like  China, India, Brazil are slowly taking steps.  Several days ago China & Brazil  has decided to  dump the U.S. dollar as an intermediary currency &  will now conduct bilateral trade in their own currencies, exchanging yuan for reais.

Beijing has similar currency deals with Russia, Turkey, Pakistan, and several other countries—and it continues to expand that list of countries. Members of the China-led Shanghai Cooperation Organization (SCO)—a bloc that consists of China, Russia, India, Pakistan, Uzbekistan, Kazakhstan, Tajikistan, and Kyrgyzstan—agreed to increase the use of their national currencies in trade between the countries.

India, also considered an ally of the United States, like China, has stepped up its efforts to internationalize its own currency, the rupee, and in doing so is helping to further the de-dollarization trend.

The Reserve Bank of India (RBI) has already given its nod to various banks from 19 countries to open Special Vostro Rupee Accounts (SVRAs) to facilitate transactions in rupees(INR ₹). Latest country joining  is  Bangladesh in addition to Botswana, Fiji, Germany, Guyana, Israel, Kenya, Malaysia, Mauritius, Myanmar, New Zealand, Oman, Russia, Seychelles, Singapore, Sri Lanka,Tanzania, Uganda, and the United Kingdom

Many more countries have also expressed their interest in transacting in the Indian currency ₹. The global acceptance of India’s digital payment systems like the Unified Payments Interface (UPI) has been steadily increasing in the last few months.

 

The BRICS (Brazil-Russia-India-China-South Africa) block is also looking at developing a new reserve currency based on a basket of currencies of the member nations.

Many pundits have opined that the exercise to make the Indian rupee global is still just a dream at this time. There is no doubt that there are several challenges to this exercise but let us take one step at a time. The process has begun, we need to see if this can be a success.

India likely to become third biggest economy by FY28

 

India likely to become the third-biggest economy behind the US and China by FY28, two years earlier than initially expected, overtaking Germany and Japan, according to the International Monetary Fund (IMF) World Economic Outlook database.

India overtook UK to became the 5^th largest economy this year.

India's GDP would match Germany's in size to become the fourth-largest by 2025–2026.

The World Economic Outlook of the International Monetary Fund (IMF) predicts that it will surpass Japan in growth and move up to the third-largest position by 2027-28 (FY28). 

 

India’s rapid progress…

• Most developed economies hit hard by pandemic and war-triggered inflation
• They will grow marginally or even go into recession
• India’s growth also took a knock but economy expected to expand at good pace
• Rupee has depreciated less than many currencies against the dollar

…but not just relative out performance

• India has sound macro fundamentals.
• Inflation high,but is not skyrocketing.
• Current account deficit high but expected to moderate 
• Forex reserves down but still at nearly $550 b Fiscal situation is comfortable 
• Banks are in a strong position and credit cycle is picking up 

FDA allows emergency use of drug remdesivir for COVID 19

The US Food and Drug Administration on Friday authorized Remdesivir (a nucleoside ribonucleic acid (RNA) polymerase inhibitor) an experimental antiviral drug, for emergency use to treat Covid-19.

The authorization allows the intravenous drug to be distributed to doctors to administer to patients with severe disease.

Many health experts have had high hopes for the drug, which was initially developed by Gilead Sciences to treat Ebola. In past,it was also  used in experiments to treat the coronaviruses SARS and MERS. That early testing gave remdesivir a head start in the race for a treatment to Covid-19.

The NIH trial, called the Adaptive COVID-19 Treatment Trial, included 1,063 patients. The results showed that the median time to recover for patients who randomly received the placebo was 15 days while patients who received remdesivir had a median recovery time of 11 days. Remdesivir also lowered the mortality rate compared to the placebo group, from 11.6 percent to 8 percent.

These results, however, are preliminary. There are at least 19 studies on remdesivir around the world underway or in planning stages, some recruiting thousands of patients. It will be several months before they yield definitive answers, but they will, hopefully, bring the world closer to a working treatment.

Earlier  a randomized trial of the drug in China recently published in the Lancet  found that there was no statistical benefit to taking the drug. The study  was based on a true randomized controlled trial from Wuhan, China, with 237 patients. The study was also peer-reviewed by other scientists. Initially, the authors wanted to include up to 450 patients, but the lockdown imposed in the city meant that patients stopped arriving.

The FDA on 28^th March, 2020  had approved  emergency use authorization to a malaria drug, hydroxychloroquine, after President Donald Trump repeatedly promoted it as a possible treatment for COVID-19. 

Here is the link to the announcement.

US FDA announcement