Will 2024 be too hot?

"India's economy is likely to surpass $4 trillion in 2024-25 and further escalate to $5 trillion by 2026-27, according to a PHDCCI report. The industry chamber also expects the RBI to cut repo rate by 100 basis points in a calibrated manner by the end of 2024." DH. Is the PHDCCI expecting the RBI to tolerate a high rate of consumer price (CPI) inflation to artificially inflate the nominal GDP while the real GDP languishes? "Indian importers and exporters left a bigger portion of their foreign currency exposure unhedged in 2023, relying on the Reserve Bank of India (RBI) holding the rupee in a narrow range." "The RBI's regular intervention in the spot and forward markets shrunk the intraday swings and overnight risks on the rupee last year, pushing volatility expectations to 15-year lows and making the rupee among the least volatile Asian currencies." Reuters. "India's forex reserves jumped by USD 2.759 billion to USD 623.2 billion in the week ended December 29, the RBI said." " In October 2021, the country's foreign kitty had reached an all-time high of USD 645 billion." FE. The RBI is helped by dollar inflows into Indian stocks. "Foreign Institutional Investors (FIIs) have poured Rs 1.32 lakh crore (Rs 1.32 trillion), or $16 billion, so far this year into the domestic market in 2023." BT. "Total net investment by FIIs in the equity market stood at Rs 1.97 trillion over April to December 2023," and "The net inflow of mutual fund capital into overpriced equity markets was at Rs 1.2 trillion during April-December 2023," wrote CP Chandrashekhar. "According to one analysis, 59 companies raised Rs 54,000 crore (Rs 540 billion) through share issues, for which the market prices turned out to be 45% higher than the issue prices on average." For FIIs this is a real bonanza. They can book substantial profits if they sell and, since the rupee stays strong due to RBI support, they will not lose when converting their gains into dollars. However, "As threats to cargo vessels on the Red Sea spikes after recent incidents, India can potentially see a drop in exports by about $30 billion, as exporters hold back on shipments due to rising fears.." HT. Not just the Red Sea, the Persian Gulf may also turn hot. "Iran on Thursday (yesterday) said it has seized an 'American' ship off the coast of Oman. According to the Iranian media, the ship was used by the United States for stealing its oil last year." HT. The ship changed course towards Bandar-e-Jask in Iran. This stinks of China. "The 2020 deal between Beijing and Tehran includes plans for China to develop several ports in Iran, such as the Bandar-e-Jask port which is strategically situated to the east of the Strait of Hormoz." "This can potentially undermine the US naval dominance in the Middle East, as having a foothold in Bandar-e-Jask would not only allow China to monitor the US Navy's Fifth Fleet based in Bahrain, but together with a presence in Gwadar and Djibouti ports, it will also augment Chinese presence in the Indian Ocean Region." Global Security. Will China try to annex Taiwan if the anti-China ruling party the DPP wins a clear majority in tomorrow's general election (CNN)? 2023 was the hottest year on record as the world was 1.48 degrees warmer. BBC. 2024 could get hotter still. Hot climate, hot events and hot money. How hot is too hot?