Rupee marks lowest level as investors flee

May 22, 2012

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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.

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News Network
June 25,2020

India has jumped past 4.5 lakh coronavirus cases and 14,476 people have succumbed to the viral infection so far. In this backdrop, speaking to IANS in an exclusive interview, AIIMS Director Randeep Guleria said India is also vulnerable to second wave of coronavirus and people should continue to follow social distancing, wearing mask and other precautions, after cases begin to decline.

He added that in order to contain the outbreak of Covid-19, a limited lockdown in hotspots, where volume of cases is very high, may be considered along with a micro-plan to prevent leakage of cases from these areas to other non-containment areas. Excerpts of the interview are below:

Q: Reports say China and South Korea are witnessing a second wave of coronavirus infection, what is this second wave, is India also vulnerable to this?

A: When cases come down significantly, people tend to drop their guard against the viral infection, and this leads to the second wave (which means a sudden increase in the number of cases). After cases begin to decline, people should continue to follow the precautions -- continue to maintain social distancing and wear masks regularly. See what happened in Singapore, it was struck by a second wave of coronavirus. Look, what happened in the 1918 pandemic, people dropped their guard and the second wave of viral infection struck back. If people do not follow social distancing then the spike in cases is apparent. We need to take these precautions at least for one year. India is also vulnerable to this second wave.

Q: If Covid-19 cases continue to rise rapidly, do you think we need another lockdown in areas where volume of cases are very high?

A: A large volume of cases is concentrated in specific areas like hotspots, and in order to maintain things in order, we may need a limited lockdown in these areas. This should be followed by a micro-plan which entails extensive testing of people and also extensive contact tracing of people who have got in touch with positive people. Need to ensure there is no leakage of cases from these areas. People from these areas should not mix with others in non-containment areas. This will aid in containing the outbreak of the virus. People who have developed symptoms should get themselves tested, especially in the containment areas.

Q: With more than 4.5 lakh cases and close to 14,500 deaths, do you think India has reached its peak and a decline in cases is prominent?

A: The cases will continue to increase for some time. The doubling time of cases has also increased. But, the cases will also begin to flatten. Though, it is difficult to give an exact time period in this viral infection, it seems, the growth in cases will flatten in the end of July or beginning of August. A decline will come to this viral infection, but it does not mean that people should drop their guard. As a measure, we need to decrease community participation and citizens should continue to follow social distancing. People should get themselves tested. All these efforts will help in preventing people from contracting this virus. These precautions will also prevent us from the second wave, and we must continue to take precautions. The virus has not gone away, it is still lurking.

Q: India has crossed the 4.5 lakh coronavirus cases so far, although our recovery rate is good, but still 10,000 to 15,000 cases are reported daily. Why do cases continue to spiral, what is the reason?

A: We have to remember a few things -- the bulk of cases are in 10 cities, nearly 70 per cent, and if we take into account cases per million population, the number is not very high, as compared with countries including countries in Europe. Many European countries put together still do not add up to the Indian population. Do not compare India to countries like Italy, Spain etc. We need to focus on hotspots, which contribute to between 70 -80 per cent of cases, and we have to identify cases in these areas at an early stage. The population density is very high in these cities. People in lower socio-economic status are highly vulnerable to the viral infection, as many live together in small spaces and there is a lot of mixing of people happening there. Look at the market places, people are not following social distancing and not wearing masks. In fact, many are in close vicinity of each other.

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News Network
July 17,2020

Lukung, Jul 17: Union Defence Minister Rajnath Singh on Friday assured that not an inch of our land can be taken by any power in the world while he interacted with the Indian Army and ITBP personnel at Lukung.

Referring to the India-China border standoff, he said, "Talks are underway to resolve the border dispute but to what extent it can be resolved I cannot guarantee. I can assure you, not one inch of our land can be taken by any power in the world."

Emphasising on finding a diplomatic solution to the standoff, he further said, "If a solution can be found by talks, there is nothing better."
"Recently what happened between troops of India and China at PP14, how some of our personnel sacrificed their lives protecting our border. I am happy to meet you all but also saddened because of their loss. I pay my tributes to them," he added.

Singh interacted with the Army and Paramilitary troops here along with Chief of Defence Staff General Bipin Rawat and Army Chief General MM Naravane.

Earlier today, the Defence Minister witnessed para dropping and scoping weapons here. He also inspected a Pika machine gun.

Indian Army T-90 tanks and BMP infantry combat vehicles carried out the exercise at Stakna, Leh in presence of Singh, Chief of Defence Staff and Army Chief.

Defence Minister is on a two-day visit to Ladakh and Jammu and Kashmir. He will take stock of the situation at both the Line of Actual Control (LAC) and the Line of Control (LOC).

While Pakistan constantly violates ceasefire from across the LoC, China has continued to intrude into Indian territory in Ladakh region in recent past, escalating tensions between India and its eastern neighbour.

On June 15, twenty Indian soldiers laid out their lives during combat with Chinese forces in Galwan valley, leading to tensions between both nations. Chinese soldiers subsequently started moving back following dialogues between two countries through the military level and diplomatic level.

Singh was accompanied by the Chief of Defence Staff General Bipin Rawat and Army Chief General MM Naravane.

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News Network
March 4,2020

Mar 4: Prime Minister Narendra Modi said on Wednesday that he has decided not to participate in any 'Holi Milan' programme as experts have advised reducing mass gatherings to avoid the spread of coronavirus.

"Experts across the world have advised reducing mass gatherings to avoid the spread of COVID19 Novel Coronavirus. Hence this year, I have decided not to participate in any 'Holi Milan' programme," the PM tweeted.

This year, Holi is on March 10.

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