Category: Money

India received close to $90 billion in remittance flows from around the world in 2022. The total remittance flows during the 2021-22 fiscal year were the highest received by India in a single year, data from India’s Ministry of Finance showed. India’s fiscal year starts on April 1 and ends on March 31.

The US, the world’s largest economy, was the biggest source of remittances to India, with a 23.4 per cent share in total remittance flows, followed by the UAE at 18 per cent. The UK was in third place with a 6.8 per cent share and Singapore was fourth with a 5.7 per cent share.

Singapore also ranked among the top remittance-sending countries to India. The Gulf countries, including the UAE, play a significant role in supporting India’s economy, as a large number of Indians residing there send money back home.

Saudi Arabia, the Arab world’s largest economy, was the sixth biggest source of remittances to India with a total share of 5.1 per cent in total remittances, while Kuwait, Oman and Qatar had a share of 2.4 per cent, 1.6 per cent and 1.5 per cent, respectively.

Recently, India and the UAE signed agreements to promote the use of local currencies and enhance cross-border transactions, further strengthening economic ties between the two nations.

The agreements, which promote the use of the Indian rupee and the dirham bilaterally, are expected to boost investments and remittances between the two countries, the Reserve Bank of India said on its website.

The two countries also agreed to co-operate on linking their fast payment systems – India’s Unified Payments Interface with the UAE’s Instant Payment Platform – to ease cross-border money transfers.

Last year, India and the UAE also signed a comprehensive economic partnership agreement, boosting economic ties between the two countries.

In June, Wealth X unveiled its yearly analysis of the global billionaire population. Utilizing RelSci, a data-driven platform, the organization examined a database containing 11 million influential individuals and 1.8 million organizations to determine where billionaires reside, based on their primary business addresses. The report revealed that the top-ranked cities housed 29% of the world’s billionaires in 2022, with nearly all of them being major global cities. This demonstrates the ongoing appeal of high-end businesses, as well as cultural and lifestyle opportunities for the ultra-wealthy.

Here are the top 10 cities with the highest number of billionaires:

New York City

Hong Kong

San Francisco

Moscow

London

Beijing

Los Angeles

Singapore

Shenzhen

Mumbai

New York City leads the pack with 136 billionaires in 2022. Despite losing two billionaires from 2021 to 2022, the city remains the global capital for billionaires. As the report states, “New York is home to the world’s largest stock markets, New York Stock Exchange and Nasdaq, and is also considered the biggest regional economy in the U.S.”

Hong Kong follows closely behind with a total of 112 billionaires, experiencing a similar decrease of two billionaires. The Wealth X report explains that although Hong Kong’s wealth portfolios were less exposed to the fluctuating global economy, the region’s divided political developments impact its attractiveness for billionaire non-financial businesses.

San Francisco ranks third with 84 billionaires, one less than in 2021. Despite this slight decline, the city witnessed a 68% growth in its high-net-worth population between 2012 and 2022, according to a Henley & Partners report. A March study from Wealth-X and REALM reveals that “there’s one ultra-wealthy homeowner in San Francisco for every 505 residents.”

Over the past decade, San Francisco has become synonymous with Silicon Valley, which experienced significant growth in 2022. The tech hub extends from the southern part of the San Francisco Bay Area to other cities such as San Mateo, Santa Clara, San Jose, Palo Alto, Cupertino, and Mountain View. Silicon Valley hosts major companies like Apple, Facebook, Google, Twitter, Nvidia, and more.

Following a court order extending the detention of former Pakistani Prime Minister Imran Khan, violence erupted in the country triggering rupee to slump to a record low.

The rupee fell by 1.9% and closed at an all-time low of 290.22 against a dollar based on State Bank of Pakistan data. On Thursday, bonds maturing in 2031 fell to their lowest point since November at 33.10 cents to the dollar due to these circumstances.

In response to the protests, Pakistan’s government requested the aid of their military to end the violent events after a judge ordered the 70-year-old politician to be in the custody of the anti-graft agency for eight days. He was detained on Tuesday.

Impacted by this unrest is Pakistan’s ongoing negotiations with the International Monetary Fund to restart its bailout program, without which the country would fall into default.

“The rupee is weakening on economic and political uncertainty, especially the delay in the IMF loan program,” said Owais-ul-Haq, a currency trader at Arif Habib Ltd. “The arrest of Imran Khan just worsened the situation.”

Your phone rings and it’s someone claiming to be from the Internal Revenue Service. Ominously, they say the police will be knocking on your door in minutes if you don’t pay your taxes right then and there.

Don’t fall for it. It’s not the IRS getting in touch with you.

Since 2018, more than 75,000 victims have lost $28 million to scammers impersonating the IRS over the phone, email, texts and more.

That’s according to data from the Federal Trade Commission, which enforces consumer protection laws, including those against fraud. The true number is almost certainly even higher, including reports to other agencies and victims who don’t make reports. And there are other types of tax scams altogether, like phony tax preparers and tax identity theft.

“Email and text scams are relentless, and scammers frequently use tax season as a way of tricking people,” IRS Commissioner Danny Werfel said in a news release last month.

As Tax Day approaches, here’s how the IRS actually contacts taxpayers and how you can spot imposters.

How the IRS will really contact you

“If the IRS contacts you, they’re never going to contact you first via email or telephone — they’re going to contact you in writing a letter,” says Christopher Brown, an attorney at the FTC.

A call or a visit usually only happens after several letters, the IRS says — so unless you’ve ignored a bunch of letters about your unpaid taxes, that caller claiming to be from the IRS is probably lying.

The IRS won’t threaten to have the police arrest you or demand that you make an immediate payment with a specific payment type, like a prepaid debit card. “That’s a sure sign that it’s a scam,” Brown says.

Taxpayers can always question or appeal what they owe, according to the IRS. Caller ID can be faked, so don’t think it’s real just because the caller ID says IRS, Brown says.

If you think a caller claiming to be from the IRS might be real, the IRS says you should ask them for their name, badge number and callback number, which you can verify with the Treasury Inspector General for Tax Administration by calling 1-800-366-4484. Then, you can either call the IRS back or report the scammer here.

What scams often look like

Aggressive and threatening scam phone calls impersonating the IRS have been a problem for years. Callers demand immediate payment, often via a specific payment method, and threaten arrest, driver’s license revocation and even deportation if you fail to pay up or provide sensitive personal information.

There isn’t data on the most common contact methods specifically for IRS imposter scams, but for government imposter scams overall, phone calls are the most common, Brown says.

These scams spread into emails and texts. Known as phishing and smishing scams, respectively, they were featured on this year’s “Dirty Dozen” list, an IRS campaign to raise awareness about tax scams.

“People should be incredibly wary about unexpected messages like this that can be a trap, especially during filing season,” Werfel, the IRS commissioner, said.

People get texts or emails that say “Your account has been put on hold” or “Unusual Activity Report” with a fake link to solve the problem. Clicking on links in scam emails or texts can lead to identity theft or ransomware getting installed on your phone or computer.

But scammers are always evolving. “Initially what we saw more was the threat with a demand that you make a payment, but then there was that new twist, which is, ‘Let’s not threaten, let’s sort of entice,’ ” Brown says.

That newer tactic of luring people with promises of a tax refund or rebate is more often employed over email or text as a phishing or smishing scam, Brown says. But both the threatening and enticing tactics are still prevalent, and they can be employed through any method of contact.

Consumers who are victims of imposter scams can report them to the IRS or to the FTC.

Regardless of the specifics, here’s a good rule of thumb from the FTC for spotting scams: “The government doesn’t call people out of the blue with threats or promises of money.” (NPR)

There soon may be new retirement rules in place that could make it easier for Americans to accumulate retirement savings — and make it less costly to withdraw them — if lawmakers pass a major spending package this week.

The retirement savings provisions – known as Secure 2.0 – were drawn from a House-passed bill and bills that were passed by two Senate committees.

“[SECURE 2.0] will help increase savings, ensure greater access to workplace retirement plans, and provide more workers with an opportunity to receive a secure stream of income in retirement,” said Thasunda Brown Duckett, president and CEO of TIAA, one of the largest US retirement service providers.

Here’s a look at seven of the provisions in the package, known on Capitol Hill as an omnibus, based on a breakdown from the Senate Finance Committee.

1. Require auto enrollment in 401(k) plans

Most employers starting new workplace retirement savings plans could be required to automatically enroll employees in the plan. (It is currently optional for employers to do so.) It would then be up to the employee to actively opt out if they don’t wish to participate.

The Secure 2.0 provision would require employers set a default contribution rate of at least 3% but not more than 10% for the employee plus an automatic contribution escalation of 1% per year up to a maximum contribution rate of at least 10% but not more than 15%.

The provision would go into effect after December 31, 2024.

2. Allow employer contributions for student loan payments

When you have to pay down student loan debt, it makes it harder to save for retirement. Secure 2.0 would let employers make a matching contribution to an employee’s retirement plan based on their qualified student loan payments. That way, it would ensure that the employee is building retirement savings no matter what.

The provision would take effect after December 31, 2023.

3. Increase the age for required minimum distributions

It used to be that when you turned 70-1/2 you had to start withdrawing a required minimum amount from your 401(k) or IRA every year. Then, the age moved up to 72. Under the Secure 2.0 package, it would move up to 73 starting in 2023 and then to 75 a decade later.

4. Help employees build and access emergency savings

Normally if you tap your 401(k) before age 59-1/2, you must not only pay taxes on that money, but also pay a 10% early-withdrawal penalty.

For employees who are dissuaded from saving money in a tax-deferred retirement plan because they are concerned it would be too complicated and costly to access it for emergencies, Secure 2.0 may assuage that fear: It would let employees make a penalty-free withdrawal of up to $1,000 a year for emergencies. While employees would still owe income tax on that withdrawal in the year it’s made, they could get that tax refunded if they repay the withdrawal within three years.

If they don’t repay the withdrawal, they would have to wait until the three-year repayment period ends before being allowed to make another emergency withdrawal. Enter your email to subscribe to the CNN Business Newsletter.

The provision would go into effect after December 31, 2023.

5. Raise catch-up contribution limits for older workers

Currently, if you’re 50 or older you may contribute an additional $6,500 to your 401(k) on top of the $20,500 annual federal limit in effect this year.

Under the retirement package, instead of $6,500, those aged 60, 61, 62 and 63 would be allowed to contribute $10,000, or 50% more than the regular catch-up amount in 2025, whichever is greater.

The provision would take effect after December 31, 2024.

To help pay for the cost of the retirement package, however, another provision which would go into effect a year earlier would require anyone with compensation over $145,000 to “Rothify” their catch-up contributions. So, instead of making before-tax contributions up to the catch-up limit, you could still contribute the same amount but you would be taxed on it in the same year. Your contribution would then grow tax free and may be withdrawn tax free in retirement. But the federal government would get the tax revenue from the original catch-up contribution up front.

6. Enhance and simplify the Saver’s Credit

An underutilized federal match exists for lower-income earners’ retirement contributions of up to $2,000 a year. The new package would enhance and simplify the so-called Saver’s Credit so more people could use it. Eligible filers (e.g., married couples making $71,000 or less) could get a matching contribution from the federal government worth up to 50% of their savings, but the match cannot exceed $1,000.

The provision would go into effect after Dec 31, 2026.

7. Make it easier for part-time workers to save

Part-time workers currently must be allowed to participate in a workplace retirement plan if they have three years of service and work at least 500 hours a year. The new package would reduce that service time to two years. The provision would go into effect after Dec. 31, 2024. (courtesy: CNN Business)

Mortgage rates jumped again, surpassing the 6% mark and reaching the highest level since the fall of 2008.  The 30-year fixed-rate mortgage averaged 6.02% in the week ending September 15, up from 5.89% the week before, according to Freddie Mac. That is significantly higher than this time last year, when it was 2.86%.

Stubbornly high inflation is pushing rates up, said Sam Khater, Freddie Mac’s chief economist.

“Mortgage rates continued to rise alongside hotter-than-expected inflation numbers this week, exceeding 6% for the first time since late 2008,” he said.

After starting the year at 3.22%, mortgage rates rose sharply during the first half of the year, climbing to nearly 6% in mid-June. But since then, concerns about the economy and the Federal Reserve’s mission to combat inflation have made them more volatile.

Rates had fallen in July and early August as recession fears took hold. But comments from Federal Reserve Chairman Jerome Powell and recent economic data have pulled investors’ attention back to the central bank’s fight against inflation, pushing rates higher.

The 10-year Treasury yield moved higher last week as markets prepared for further monetary tightening by the Fed, said George Ratiu, manager of economic research at Realtor.com.

The Federal Reserve does not set the interest rates borrowers pay on mortgages directly, but its actions influence them. Mortgage rates tend to track yields on 10-year US Treasury bonds. As investors see or anticipate rate hikes, they often sell government bonds, which sends yields higher and with it, mortgage rates.

Investors reacted to August’s inflation numbers, which showed that consumer prices continued to rise at 1980s levels, said Ratiu.

“Core inflation remains stubbornly elevated, putting pressure on the Federal Reserve to maintain an aggressive stance on monetary tightening,” he said. “Markets are keeping a close eye on the central bank’s meeting next week, expecting another 75-basis-point increase in the policy rate, if not a 100-basis-point jump.”

Sales are slowing, but affordability is still a challenge

As mortgage rates rise and home prices remain high, home sales are slowing.  With rates essentially double where they were a year ago, applications for home loans have dropped and applications to refinance into a lower payment have fallen off a cliff, down 83% from a year ago, according to the Mortgage Bankers Association.

“Higher mortgage rates … have contributed to more homebuyers staying on the sidelines,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting.

A year ago, a buyer who put 20% down on a $390,000 home and financed the rest with a 30-year, fixed-rate mortgage at an average interest rate of 2.86% had a monthly mortgage payment of $1,292, according to calculations from Freddie Mac.

Today, a homeowner buying the same-priced house with an average rate of 6.02% would pay $1,875 a month in principal and interest. That’s $583 more each month.

“With real median household incomes remaining relatively unchanged, many first-time homebuyers are finding the door to homeownership is closed for this season,” said Ratiu.

He said that with borrowing costs expected to continue rising in the next few months, it is becoming increasingly clear that home prices need to decline to bring balance back to housing markets.

“Many sellers are recognizing the shift in market conditions and are responding by cutting their asking prices,” he said. “These changes are coinciding with the time of the year when buyers have historically found the best market conditions to find a bargain.”

The Indian Rupee breached the psychological 80-mark for the first time against the US dollar on Tuesday, July 18^th, declining to 80.06 per Dollar. The Reserve Bank of India intervened in the currency market to help the Rupee steady after hitting seven straight intraday record lows. A recovery in domestic shares also favored the Indian currency.

According analysts, a wobbly global macroeconomic environment marked by a spell of monetary tightening unleashed, firstly, by the Federal Reserve and being mimicked in earnest by the major central bank governors across the globe has led to an exodus of hot money from developing economies to the “safe haven” of the Dollar. The scenario is compounded further by record-breaking crude oil prices, which balloon India’s imports, diminish the cumulative value of India’s exports and widen our trade deficit.

It is a regular demand-supply market. Currently, there is a greater demand for Dollars than there is for the Rupee. Two factors have pushed demand — India’s current account deficit has sharply widened particularly after Russia invaded Ukraine, and investment in the Indian economy has fallen due to heavy flight of funds in recent months.

Depreciation of the Rupee makes imported items — including petrol and mobile phones — and gives India’s export a competitive edge. But India is a net importer. For those eyeing a trip abroad, earlier budgets on food, boarding, and transportation will now fall short – leaving one with the option to either expand their budgets or opt for countries where the rupee commands a stronger position compared to their domestic currencies.

The dollar has been appreciating against all currencies including the Euro. Market watchers, in fact, say that the Rupee has fared better compared to other currencies including the Euro.

In FY’22, as per the provisional figures released by the Reserve Bank of India (RBI), India’s current account deficit widened to $38.7 billion from a surplus of $23.9 billion in the previous FY.

A widening current account deficit indicates that Indians have been converting more of their rupees into dollars to complete trade and investment transactions consequently spiking up the demand for dollars. It doesn’t help that foreign institutional investors (FIIs) have been dumping Indian equities after a strong bullish spell, and making a beeline for US treasury notes and bonds.

The RBI has intervened by selling Dollars to check the Rupee’s slide. Else, the free market would have seen a further weaker Rupee. The current exchange market scenarios suggest that the rupee’s fall may continue for a few more months, breaching even the 82-mark. Congress leader Shashi Tharoor took a dig at the Rupee’s slide saying a “strong government” is “giving us a weaker Rupee”.