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The focus of monetary policy is now conclusively on ensuring better transmission. Towards this, for the first time in recent history the RBI has consciously moved liquidity stance to positive. Indeed, the Governor has lately referred to the Rs 1-1.5 lakh crore positive system liquidity as a comfort factor and facilitator for banks.
It thus seems reasonable to infer, in the absence of an official framework on liquidity ‘targets’, that the RBI will want to ensure sustained liquidity surpluses of this magnitude going forward as well.
The micro aspects:
As per our estimates, the so-called ‘core’ system liquidity (total banking liquidity minus government balances) is around Rs 65,000 crore as on early August. Assuming currency in circulation (CIC) seasonality of last year and superimposing a nominal growth rate to this, the system will lose around Rs 2,20,000 crore from here to March 2020.
Adding back a higher RBI dividend and some balance of payment accretions, we are largely left with zero core liquidity by end of the financial year. However given the RBI’s current liquidity preference, we would assume they would want core liquidity to be at least be in surplus by a similar magnitude as today. This means that one should reasonably expect further open market operation (OMO) bond purchases from the RBI of at least Rs 65,000-75,000 crore between now and end of the financial year.
A further implication of this is that domestic net government bond supply between October and March is largely agnostic to whether the government decides to do a foreign currency sovereign bond issue or not. This is assuming that say $10 billion raised by government from offshore sovereign bonds would have been entirely converted by RBI into rupee liquidity. Thus the need for OMOs would have fallen to that extent.
Refreshing a table we had done in an earlier note, the Rs 70,000 crore assumed for the sovereign bond issue may just end up getting replaced as RBI OMO should the bond issue not happen.
While on the subject, one has to comment on the conceptual fallacy in the criticism often levied towards RBI’s OMOs as being monetisation of government deficit. Assuming an unwillingness to cut Cash Reserve Ratio (CRR), the only two other tools for policy driven liquidity creation is purchase of forex or bonds. Long term repos are no solution since this is ‘borrowed’ and not permanent liquidity.
Given that purchase of forex is a function of flows that the RBI doesn’t directly influence, it has to resort to purchase of bonds for discretionary enhancements in core liquidity. Now, if this were being done much beyond the requirements of liquidity creation for the explicit purpose of supporting the bond issuance program or was systematically tied to the quantum of such program or didn’t display two-way directionality, then one could have legitimately argued for backdoor monetisation.
However, there is no evidence of this as well. Thus, any impact from OMOs has to be treated as largely an unavoidable cost of policy implementation just as other tools affect other market variables.
The macro aspects:
As can be seen, after the disruption from the global financial crisis (GFC) had subsided, the ratio of broad money (M3) as proportion of quarterly GDP had largely settled in a range. This broke lower post demonetisation, but hasn’t reverted still to its previous range. This is despite the well acknowledged growth slowdown that has now been underway for some time.
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After largely tracking nominal GDP growth rates between 2012 and 2015, M3 growth had started to fall below GDP growth from early 2016, even before demonetisation. It is only very recently that M3 growth has been catching back with nominal GDP.
It can be argued that a necessary ask from monetary policy in response to the broad-based slowdown is for a higher rate of money supply growth than what has been in the recent few years. Indeed, that seems to have been the case also in the ‘golden’ growth period of 2005 – 2008, where M3 growth was much above nominal GDP growth. Assuming no changes to the money multiplier, this implies a higher pace of expansion in RBI’s balance sheet, including through more aggressive purchases of domestic bonds. (IANS)
NASA will pay up to $1 million to people who can come up with innovative and sustainable food production ideas to feed astronauts in space, as the US space agency prepares to send astronauts further into the cosmos than ever before. Giving future explorers the technology to produce nutritious, tasty, and satisfying meals on long-duration space missions will give them the energy required to uncover the great unknown. In coordination with the Canadian Space Agency, NASA has launched the 'Deep Space Food Challenge' that calls on teams to design, build, and demonstrate prototypes of food production technologies that provide tangible nutritional products -- or food.
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"Feeding astronauts over long periods within the constraints of space travel will require innovative solutions," said Jim Reuter, associate administrator for NASA's Space Technology Mission Directorate in Washington, DC. "Pushing the boundaries of food technology will keep future explorers healthy and could even help feed people here at home," he said in a statement. Over time, food loses its nutritional value. That means for a multi-year mission to Mars, bringing along pre-packaged food will not meet all the needs for maintaining astronaut health.
Innovative food production technology that produces safe, acceptable, palatable, nutritious food products. |UnsplashUnsplash
In October 2021, Phase 1 of the challenge culminated as NASA awarded 18 teams a total of $450,000 for their concepts for innovative food production technology that produces safe, acceptable, palatable, nutritious food products. NASA now invites both new and existing teams to enter Phase 2 for a prize purse up to $1 million. "Everything needed to store, prepare and deliver food to the crew, including production, processing, transport, consumption, and disposal of waste should be considered," said NASA. Proposed technologies such as plant growth systems, manufactured food products, and ready-to-eat solutions combined could provide the future crews with a variety of options that would provide the needed daily nutrition, it added. (IANS/SP)
(Keywords : NASA, innovative, food, healthy, idea, astronaut, USA, tasty, technology, space, travel, explorer, health, nutrition, prize, solution, variety.)
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People suffering from depression are more likely to believe vaccine-related misinformation, according to a new study. The study found that people with moderate or greater symptoms of depression were more likely to believe at least 1 of 4 false statements about Covid-19 vaccines.
Those who believed the statements to be true were half as likely to be vaccinated, the study, published in the Journal of the American Medical Association, indicated. 'It is clear the pandemic has taken a heavy toll on the mental health of Americans, especially young people," said researcher Katherine Ognyanova from Rutgers University, the US.
People suffering from depression are more likely to believe vaccine-related misinformation. | Unsplash
According to the National Center for Health Statistics, approximately one-quarter of adults in the US have consistently reported moderate or greater depressive symptoms during the Covid-19 pandemic. The findings suggest that people suffering from depression may be at a higher risk of Covid-19, highlighting the need to address mental health disorders.
For the study, the team used data from the research group The Covid States Project, which conducted surveys approximately once every six weeks since April 2020. The researchers analysed data from 15,464 adults in the US and the participants were asked to rate vaccine-related misinformation as accurate (statement is true), inaccurate (statement is not true) or not sure.
Approximately one-quarter of adults in US reported moderate or greater depressive symptoms during the Covid-19 pandemic. | Unsplash
The four statements of misinformation included "The Covid-19 vaccines will alter people's DNA", "The vaccines contain microchips that could track people", "The vaccines contain the lung tissue of aborted fetuses", and "The -19 vaccines can cause infertility, making it more difficult to get pregnant". The survey participants completed a health questionnaire to measure major depressive symptoms over two weeks. (IANS/ MBI)
(Keywords: depression, vaccine, misinformation, patients, health questionnaire, study)
The space economy is on track to be valued at a trillion dollars by the end of 2030, but assets such as navigation, weather and communication satellites that serve our society daily are threatened by space debris, an Indian-American professor has stressed. According to NASA, it is estimated that millions of pieces of space debris orbit around Earth. A major portion of these objects as well as active satellites reside in the low-Earth orbit region, at altitudes between 200 km and 1,000 km. In November last year, Russia destroyed one of its own satellites with a ground-based missile, creating thousands of pieces of debris that passed through the International Space Station (ISS).
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The astronauts and cosmonauts had to take shelter in their Soyuz and Dragon vehicles docked at the space station, as the orbital lab continued to pass through a debris field every 90 minutes. The US identified more than 1,500 trackable pieces of debris from the event, and many thousands of smaller ones couldn't be traced. According to Piyush Mehta, Assistant Professor of mechanical and aerospace engineering at West Virginia University, the US, in low-Earth orbit, our ability to safeguard these space assets depends on modelling of the aerodynamic forces acting on the satellites, specifically satellite drag.
The astronauts and cosmonauts had to take shelter in their Soyuz and Dragon vehicles. |Unsplash
"The drag force acting on a satellite is affected by various physical parameters, however, the most crucial and uncertain are the drag coefficient and mass density," said Mehta, who leads a collaborative effort on satellite drag coefficient modelling under the International Space Weather Action Teams (ISWAT) initiative. Mehta explained that because of the interconnectedness of the two parameters, one of them is held constant, typically the drag coefficient, while the other is investigated.
However, he added that this causes inconsistencies or inaccuracies in our understanding of the mass density variability in the upper atmosphere or thermosphere. Jason Gross, Interim Chair of mechanical and aerospace engineering at the Statler College, West Virginia University, said: "With the continued rapid increase of manmade satellites in low-Earth orbit, his (Mehta's) work towards improved orbital decay prediction becomes more important for the future of space environment sustainability with each passing day. His lab is at the forefront of this important field." (IANS/SP)
(Keywords : dollar, space, economy, debris, satellite, navigation, weather, orbit, astronaut, cosmonaut, inconsistency, aerospace, collaborative.)
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