1) Answer in brief the following questions with justifications.
a. Indian foreign exchange market is quoting USD/INR spot 76.54/76.58. MNO India has has received USD 5 mn today. At which exchange rate this inward remittance will be converted into INR?
b. P&Q Ltd has a USD account with State Bank of India. They have to pay their import bill in JPY. USD/JPY is quoted at 116.72/116.78 . At which rate P&Q Ltd import transaction will be taken up?
c. Super Surgical India Ltd., imports certain medical instruments from Germany and sells them to some of the leading hospitals of India. Import bills are in EUR. Local sales invoice is done in INR. One equipment with a value of EUR 2 mn is sold to Apollo Hospital. EUR/INR is quoted by the bank as 84.13 / 84.15 (84.13/15). Which of these rates will be picked up by Super surgical to invoice Apollo Hospital?
d. Infrapro Ltd has ordered one scientific equipment from Switzerland for one of their projects in Bangladesh. USD/CHF is quoted at 0.9345/0.9350 (0.9345/50). Infrapro Ltd will be paying the Swiss seller from its USD account with Citi Bank, Mumbai. At which rate this import payment will be taken up?
e. In another transaction your company is importing equipment from US and directly selling this to a party in Indonesia. Consignment will not touch Indian Customs Territory. This transaction will be treated as:
i. High sea sales
ii. Merchanting trade
Explain with reasons the choice you make.
3. Is the Indian Rupee freely convertible? Provide reasons for the same. What are the benefits of the Indian Rupee being a freely convertible or vice versa? Discuss from the perspective of your company. -
1) Mitsubishi Tokyo , a Japanese company is planning to remit JPY 500,000 to Indian subsidiary. The Indian subsidiary wants to convert this Japanese Yen JPY to Indian Rupees (INR). Below are the market exchange rate quotes:
USD/JPY: 116.72 / 116.78
USD/INR: 76.54/76.58
What will be the exchange rate quoted by its bank to the Indian subsidiary for JPY/INR inward remittance. Your answer should be rounded off to 2 decimals.
2) Due to the RUSSIA and UKRAINE war, what impact it has made to the Dollar Rupee and Russian Ruble and the reason behind the change. What do you expect the impact on the same after the pandemic?