Prime Minister: Manmohan Singh

The Age Of Stars

The gold airlift, liberalisation, and a floating rupee.

Vol. CXXXIVThe edition of 2008 · The Open Economy17 records
Prime Minister
Manmohan Singh
President
Pratibha Patil
Finance Ministers
P. Chidambaram · Manmohan Singh
RBI Governors
Y. V. Reddy · Duvvuri Subbarao

Rupee per dollar

₹43.39

+5.4% on 2007

Inflation

8.35%

+1.98 pts on 2007

GDP growth

3.09%

−4.57 pts on 2007

Reserves

$257,423m

−6.9% on 2007

External debt

$227,112m

+11.3% on 2007

Brent crude

$96.94

+33.5% on 2007

Equities / FX / credit · 21 January 2008

Global Financial Crisis

Sensex ~21,200 (2008-01-10, intraday peak) → ~7,700 (2008-10-27, intraday low); calendar 2008 ≈ −52%; INR ~39 → ~50 per USD

Lehman collapse 2008-09-15; RBI cut CRR/repo rapidly Oct 2008–Apr 2009; fiscal stimulus packages

ReportedOfficial record. Source: BSE; RBI press releases 2008–09

Markets & Money

5 items

BSE Sensex · 21 January 2008

Black Monday": global sell-off on US recession fears

−1,408 pts, then the largest-ever point fall; intraday low 16,963.96; close 17,605.40

Sensex peaked at ≈21,206 on 2008-01-10 (close) / 2008-01-10 intraday ≈21,207. Part of the 2008-01-21/22 crash.

ReportedPress. Source: Business Standard / IANS 2015-08-24 "'Manic Monday' of January 2008 revisited"

RBI reserves · 23 May 2008

Forex reserves at their pre-crisis peak

USD 316.17 bn (week ended 2008-05-23)

Down to USD 252 bn by end-March 2009 (≈−USD 64 bn) through RBI intervention.

ReportedOfficial record. Source: Business Standard (RBI weekly statistical supplement); Economic Survey 2008-09 ch. 6

Sensex, INR, money markets · 15 September 2008

Lehman Brothers bankruptcy: 2008 global financial crisis

See rows below

FII outflows; call rates spiked in 2008-10. The RBI cut CRR from 9% to 6.5% within weeks (≈INR 1 lakh crore injected) and relaxed ECB and FCNR(B) terms.

ReportedOfficial record. Source: RBI Annual Report 2008-09; PSA Legal

BSE Sensex · 24 October 2008

Sensex falls below 9,000

−1,070.63 pts intraday (−10.96%); close 8,701.07

First close below 9,000 since 2006-06. Came after the RBI lowered its GDP forecast.

ReportedPress. Source: Wikipedia "Stock market crashes in India"; Business Standard 2008-10-10

BSE Sensex; INR · 31 December 2008

Calendar year 2008

Sensex −52.5% (−10,640 pts) for the year. INR −19.2% against the USD (≈39.4 → ≈48.6), with a lifetime low of 50.65 during the year.

The trough, ≈8,160 (2009-03-09), is not confirmed by a source I saw.

ReportedPress. Source: Business Standard 2008 year-end; MAS LLP "Journey of Indian Stock Market 2008–2010"

Trade & Tariffs

1 item

Post-Lehman capital-account easing

Wider ECB all-in-cost ceiling (6m LIBOR + 450 bp), higher FCNR(B) rate ceiling, broader ECB definition of…

Wider ECB all-in-cost ceiling (6m LIBOR + 450 bp), higher FCNR(B) rate ceiling, broader ECB definition of infrastructure (2008-10-08), CRR cuts. Aimed at capital inflows rather than goods trade.

ReportedOfficial record. Source: RBI Annual Report 2008-09; PSA Legal

War & Unrest

3 items

South Asia (Mumbai)

Mumbai terror attacks

BSE/NSE closed 2008-11-27 in the middle of the GFC sell-off; hotel/tourism shock; no Lloyd's listing of Indian ports found

ReportedPress. Source: NSE/BSE circulars; press

Afghanistan

Suicide bombing of the Indian Embassy in Kabul

58 killed and 141 wounded. Security costs rose for India's aid projects, and the attack signalled Pakistan-linked opposition to India's presence in Afghanistan.

ReportedOfficial record. Source: Wikipedia "2008 bombing of Indian embassy in Kabul"; UN SC press SC/9386

India / Pakistan

26/11 Mumbai attacks

166 killed (not re-verified). Home Minister Patil resigned and Chidambaram moved from Finance to Home. Markets were shut 2008-11-27 (not re-verified). Coming on top of the Lehman sell-off, it hit tourism and hotel stocks.

ReportedOfficial record. Source: PIB / MHA; press

Courts & Scandal

1 item

telecom spectrum

2G spectrum allocation (disclosed in the CAG report of 2010-11)

Telecom Minister A. Raja (DMK) allotted 122 licences in 2008 at 2001 prices, first-come-first-served. The Supreme Court cancelled all 122 licences on 2012-02-02. All accused were acquitted by the special CBI court on 2017-12-21. The CAG number is notional, and former RBI Governor Subbarao later called it "contestable". Both figures are kept because the official sources disagree.

ReportedPress. Source: Scroll "how Vinod Rai arrived at… 1.76 lakh crore"; Business Today 2024-05-01 (Subbarao); The Quint

Shipping & Insurance

1 item

all

Somali territorial waters / Gulf of Aden (India–Europe lane)

ReportedPeer-reviewed. Source: [M11] Strauss Center (no original cited)

The Ledger: what was borrowed in 2008

Full ledger →
CreditorInstrumentAmountUS$ mStatusGrade
ECB lenders (aggregate)ECB approvals, FY2008-09 (global financial crisis)16,517 USD16,517flowverified
All external creditors (aggregate stock)Total external debt, end-March 2008224.4 USD bn224,400Stockreported
Foreign banks and bond markets (ECB lenders, not named)External commercial borrowing, policy relaxationPolicy change 2008-10. The volume effect was not extracted.reported
Non-resident Indians (FCNR(B) depositors)FCNR(B) deposit rate ceiling raisedPolicy change 2008-09/10.reported
Bank of Japan / Government of JapanBilateral currency swap arrangement3 USD bn3,000Contingent line. Not found drawn.reported

Rows are listed as recorded. Some describe the same loan from different sources and must not be added together.

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