Rupee marks lowest level as investors flee

May 22, 2012

rupee_100x00

Mumbai, May 22: India's rupee fell past 55 per dollar to a record low as concern Europe's debt crisis will worsen prompted investors to pull money out of emerging-market assets.

"It has been touching lows quite regularly, said Subir Gokarn, a deputy governor at the Reserve Bank of India. "There is clearly a strong pressure on the rupee to depreciate. This is coming from a number of factors. One is clearly the current account deficit, demand from oil has been strong and the capital flows are not matching that," he said.

"We have done a number of things and will continue to do things that we think will have the impact of stabilizing the currency. But ultimately capital flows are going to be the main determinant of how the currency behaves.''

Sweeping declines

The MSCI Asia-Pacific Index of shares lost 10 per cent this month as global funds pulled $6.2 billion (Dh22.76 billion) from the stock markets of India, Indonesia, South Korea and Taiwan, according to the latest exchange data.

German and French leaders meet this week to discuss a revised plan for the euro amid concern Greece is close to an exit from the monetary union. The rupee is also weakening because India's fiscal policy is "too loose" and that is widening the current-account deficit and spurring inflation, according to BNP Paribas.

"An improvement in the situation in Europe and firmer global risk appetite is a necessary, although not sufficient, condition for the rupee to stabilise," Richard Iley, the Hong- Kong based chief economist for Asia at the French bank, wrote in a research note released yesterday. "Fiscal laxity is the root of the problem."

The rupee dropped 1.1 per cent to 55.0350 per dollar in Mumbai, according to data compiled by Bloomberg. It touched an all-time low of 55.0550 and has slumped 7.6 per cent this quarter in Asia's worst currency performance.

India's budget deficit widened to 5.9 per cent of gross domestic product in the fiscal year ended March 31, compared with a target of 4.6 per cent. finance minister Pranab Mukherjee aims to narrow the shortfall to 5.1 per cent this fiscal year.

Rising volatility

The rupee's one-month implied volatility, a measure of exchange-rate swings used to price options, was unchanged at 13 per cent. It touched this year's high of 13.27 per cent on May 18.

The central bank cut the amount of overseas income companies can hold in foreign currency this month to 50 per cent from 100 per cent, in a bid to boost dollar inflows and stem the rupee's slide.

On May 4, policy makers raised interest rates on non-rupee deposits by as much as 300 basis points and freed up borrowing costs on foreign-exchange loans to exporters.

Gold: Debt crisis dims allure

Gold declined in New York as concerns that Europe's debt crisis is worsening boosted the dollar and curbed the appeal of precious metals as alternative investments.

The euro fell as much as 0.4 per cent against the dollar as German and French officials meet today to discuss ways to contain Europe's financial turmoil. Before today, gold declined 4.3 per cent this month, while the dollar climbed 3.2 per cent against a basket of six currencies.

"The flight is towards the dollar," Bart Melek, the head of commodity strategy at TD Securities in Toronto, said in a telephone interview. "The softness in the euro is keeping gold under pressure."

Gold futures for June delivery fell 0.3 per cent to $1,587.70 an ounce at 10:01 am on the Comex in New York.

Demand for bullion in India, the world's largest consumer, dropped to the weakest since late March on May 18, UBS said in an emailed report on Monday.

Comments

Add new comment

  • Coastaldigest.com reserves the right to delete or block any comments.
  • Coastaldigset.com is not responsible for its readers’ comments.
  • Comments that are abusive, incendiary or irrelevant are strictly prohibited.
  • Please use a genuine email ID and provide your name to avoid reject.
News Network
January 9,2020

Raipur, Jan 9: An outbreak of bird flu has been reported from a state-run poultry farm in Chhattisgarh's Korea district, prompting the authorities to cull over 15,000 birds and step up vigil on poultry birds within 10 km radius of the affected area, officials said on Thursday.

So far, 15,426 chickens and quails have been culled and 30,000 eggs destroyed after the highly contagious H5N1 virus was detected among birds at the poultry farm and hatchery in Baikunthpur town, located around 300 km from here, they said.

There has been no case of infection in humans so far due to the outbreak of avian influenza, they said.

"After some chickens and quails were found dead on December 7 last year in the farm, their samples were collected and sent to local laboratories for testing," Dr R S Baghel, deputy director, veterinary department, Korea, told news agency.

When the disease was not properly detected, samples were further sent to Jabalpur in Madhya Pradesh where veterinarians suggested symptoms of chronic respiratory disease, following which their line of treatment was followed.

"Despite the treatment, the abnormal deaths of birds continued," Baghel said.

Later, the samples were sent to Bhopal-based National Institute of High-Security Animal Diseases where tests were found positive for the H5N1 virus on December 23, he said.

"Immediately after getting reports of bird flu, we took permission from the Korea district administration, as per the standard procedure, and culled all 15,426 birds (chickens and quails) and destroyed 30,000 eggs in the farm and its adjoining areas," the official said.

Of the total culled birds, nearly 641 chickens were being reared by locals within one km radius of the farm. The locals were given compensation for the culling of their birds, he said.

"We have completed the culling process and sealed the farm. After sanitising the area in 10 km of its radius, we submitted a report to the state's directorate of veterinary services on Wednesday," Baghel said.

"No human has been affected due to the outbreak and the situation is under control. We are waiting for further directives from the higher authorities," he said.

The official said for the next three months, they will be conducting surveillance in 10 km radius of the affected area during which blood samples of birds will be regularly sent to Bhopal for testing.

"We will continue our observation for next three months," he added.

Meanwhile, state veterinary services director C R Prasanna said, "No human has so far been affected due to avian influenza and workers at the poultry farm at Baikunthpur have been given medicines as a precautionary measure."

Nearly 40 villages fall within the purview of 10 km radius of the affected area from where random sampling of poultry birds will be done for next three months to check whether they are infected with avian influenza, he said.

"Necessary steps are being taken to prevent bird flu from spreading to other areas," he added.

Comments

Add new comment

  • Coastaldigest.com reserves the right to delete or block any comments.
  • Coastaldigset.com is not responsible for its readers’ comments.
  • Comments that are abusive, incendiary or irrelevant are strictly prohibited.
  • Please use a genuine email ID and provide your name to avoid reject.
News Network
April 26,2020

Thiruvananthapuram, Apr 26: Kerala Chief Minister Pinarayi Vijayan on Saturday urged media houses not to resort to layoffs and pay cuts while the whole community is facing the COVID-19 pandemic.

The Chief Minister said the state government will also take necessary steps to test the media personnel in the state to ensure they have not contracted the deadly virus.

He also pointed out that the pandemic has severely impacted the media sector with many newspapers even reducing the number of pages.

"Journalists are among those who have been affected the most. Journalists on the field are also in danger. We have come to know about the reporters affected with coronavirus in other states. The government will take necessary precautions including testing to ensure that journalists don't contract the disease," Vijayan said.

He said the newspapers were not receiving advertisements these days because there are no social or public events resulting in less commercial activities in the society.

"I would like to urge the media houses not to engage in layoffs or salary cuts during this pandemic. Journalists are working shoulder to shoulder with health workers. During this pandemic, scribes are out in the field collecting news, despite the threat of disease and it was admirable," Vijayan said.

The chief minister said the government has asked the PRD to release the dues to various media houses.

Comments

Add new comment

  • Coastaldigest.com reserves the right to delete or block any comments.
  • Coastaldigset.com is not responsible for its readers’ comments.
  • Comments that are abusive, incendiary or irrelevant are strictly prohibited.
  • Please use a genuine email ID and provide your name to avoid reject.
News Network
July 15,2020

New Delhi, Jul 15: Former Rajasthan deputy chief minister Sachin Pilot on Wednesday said that he is "not" joining the Bharatiya Janata Party (BJP).

"I am not joining BJP," said Pilot in a telephonic conversation with ANI.

The comments came a day after he was sacked as Rajasthan deputy chief minister and Pradesh Congress Committee chief by the party.

The decision to sack Pilot was taken yesterday after a CLP meeting at the Fairmont Hotel in Jaipur, Rajasthan.

At the meeting, as many as 102 MLAs unanimously demanded that Pilot should be removed from the party.

The Rajasthan Congress is in turmoil over the past few days. While chief minister Ashok Gehlot has blamed the BJP for attempting to destabilise the state government by poaching MLAs, Pilot has been camping in Delhi.

A controversy broke out in Rajasthan after special operation group (SOG) sent a notice to Pilot to record his statement in the case registered by SOG in the alleged poaching of Congress MLAs in the state.

Comments

Add new comment

  • Coastaldigest.com reserves the right to delete or block any comments.
  • Coastaldigset.com is not responsible for its readers’ comments.
  • Comments that are abusive, incendiary or irrelevant are strictly prohibited.
  • Please use a genuine email ID and provide your name to avoid reject.