please help me my homework.

 

1)Select an industry or economic sector and examine how Covid-19 Pandemic has affected it in recent years. 

o  For example, the effect of Covid-19 Pandemic on trade: The case of X country

o  For example, the effect of Covid-19 Pandemic on stock market: The case of X country

o  For example, the effect of Covid-19 Pandemic on foreign exchange rate: The case of X country

o  For example, the effect of Covid-19 Pandemic on international capital flows

Refer answer below

Step-by-step explanation

The country chosen is INDIA

effect of Covid-19 Pandemic on trade of Inida:?

India's import basket saw a dip of 16 per cent during March 1-19 period mainly driven by decreased imports of precious & semi precious stones, gold and sharp drop in crude oil prices.

The exports for the same period came down by 8.2 per cent to $16.3 billion

At the same time, muted exports could shave off India's economic growth that already faces a challenges on the domestic front due to an ongoing slowdown and coronavirus pandemic.

India's exports rose for the first time in seven months in February, up by 2.9 per cent and driven by growth in shipments of sectors such as petroleum, engineering and chemicals.

For the April-February period of the current fiscal, exports dropped by 1.5 per cent to $292.91 billion.

 effect of Covid-19 Pandemic on stock market of India:

The sentiment in the stock markets across the world is gloomy. This is reflected in the frequent crashes in the share markets in all parts of the world. Financial markets in India are witnessing sharp volatility currently as a result of the fallout in global markets. The fall is in line with the global benchmark indices as the domestic market usually tracks the major global indices and the high volatility is likely to continue in the near future. Further, with overseas investors (FPIs) flying to the safety of dollar-backed assets from emerging markets has led to a sharp downfall in the Indian Stock Market. S&P BSE Sensex which was 42273 points on 20 January, 2020 is 29894 points on 08 April, 2020. The price to Earnings Ratio of Sensex is less than 18 (P/e is 17.81 on 31March, 2020) which is far less than the historical range between 20-24. Markets across large, mid, and small caps have corrected sharply from their peaks. In the FY20 the mid-cap index fell by 26 per cent while the Sensex fell by 22 per cent.

 effect of Covid-19 Pandemic on foreign exchange rate of India:

Essentially, a currency's exchange rate vis-a-vis another currency reflects the relative demand among the holders of the two currencies. This demand, in turn, depends on the relative demand for the goods and services of the two countries. If the US dollar is stronger than the rupee, then it shows that the demand for dollars (by those holding rupee) is more than the demand for rupees (by those holding dollars).

India's foreign exchange reserves likely fell $5.3 billion from the peaks as the central bank intervened to reduce the slide of the currency.

India's reserves fell from its peak of $487 billion to $ 481.9 billion during the week ended March 13, latest data released by the Reserve Bank of India said.

According to a Bloomberg report, foreign-exchange reserves plunged the most in about eight years as the central bank stepped in to defend the rupee.

The increased risk aversion on account of the fallout of the new corona virus disease ( COVID-19), that is emerging as a global Pandemic has resulted in foreign investors pulling out from the emerging markets. It is estimated that they have pulled out close to $ 9 billion from the Indian markets causing the rupee to depreciate against the rupee. In the month of March so far, the rupee has slipped around 3 per cent to the dollar. The central bank on its part had to intervene to stem the fall of the rupee.

effect of Covid-19 Pandemic on international capital flows

The spread of COVID-19 has led to large foreign exchange (FX) moves, as past global crises have, but both the scale of the epidemic and the speed of its global spread makes the current situation unique. In particular, the pattern of FX dynamics is fast-tracked and capital outflows from emerging markets (EMs), week on week, are much larger than in previous crises.

Coming back to the current COVID-19 crisis, while the scale of the dollar appreciation to date is not as large as in 2007, the associated capital outflows from EMs, week on week, are many times larger than at the peak of the GFC. Real-time data also indicate that capital outflows from EMs week on week have been double the peak weekly outflows seen around the 2013 US taper tantrum - stressing the EM economies to the max. As of the end of March, nearly 80 countries are requesting IMF help, while, according to the IMF, $83 billion have left them since the beginning of the crisis.

While these outflows may subside, the evidence from Figure 3 would be consistent with further pressure on the dollar to appreciate in the near future. As many of these EMs are central to the global production network, policy action to sustain supply chains and demand for commodities (for example food) will be crucial in helping many contain the economic disruption.