US may remove India from currency monitoring list

Agencies
October 18, 2018

Washington, Oct 18: The US could remove India from its currency monitoring list of major trading partners, the Treasury Department has said, citing certain developments and steps being taken by New Delhi which address some of its major concerns.

India for the first time was placed by the US in its currency monitoring list of countries with potentially questionable foreign exchange policies in April along with five other countries – China, Germany, Japan, South Korea and Switzerland.

The Department of Treasury maintained the same monitoring list in its latest report released on Wednesday but said if India continues with the same practices as in the last six months, it would be removed from its next bi-annual report.

"India's circumstances have shifted markedly, as the central bank's net sales of foreign exchange over the first six months of 2018 led net purchases over the four quarters through June 2018 to fall to USD 4 billion, or 0.2 per cent of the GDP," the Treasury said in its latest semi-annual Report on Macroeconomic and Foreign Exchange Policies of Major Trading Partners of the US.

This represented a notable change from 2017, when purchases over the first three quarters of the year pushed net purchases of foreign exchange above two per cent of the GDP, it said.

Recent sales have come amidst a turnaround in foreign portfolio flows, as foreign investors pulled portfolio capital out of India (and many other emerging markets) over the first half of the year, it said.

The rupee depreciated by around seven per cent against the dollar and by more than four per cent on a real effective basis in the first half of 2018, the report said.

India has a significant bilateral goods trade surplus with the US, totalling USD 23 billion over the four quarters through June 2018, but India's current account is in deficit at 1.9 per cent of the GDP.

"As a result, India now only meets one of the three criteria from the 2015 Act. If this remains the case at the time of its next report, Treasury would remove India from the monitoring list," the Treasury said.

Observing that India's current account deficit widened in the four quarters through June 2018 to 1.9 per cent of the GDP, following several years of narrowing from its 2012 peak, the Treasury said the current account deficit has been driven by a large and persistent goods trade deficit, which has in turn resulted from substantial gold and petroleum imports.

The goods trade deficit has widened out in the first half to 6.4 per cent of the GDP as oil prices have risen.

The IMF projects the current account deficit to be around 2.5 per cent of the GDP over the medium term as domestic demand strengthens further and favourable growth prospects support investment.

India's goods trade surplus with the US was USD 23 billion for the four quarters through June 2018, it said, adding that India also had a small surplus in services trade with the US of USD 4 billion over the same period.

"India's exports to the US are concentrated in sectors that reflect India's global specialisation (notably pharmaceuticals and IT services), while US exports to India are dominated by key service trade categories, particularly travel and higher education," the report said.

The Treasury praised India for being "exemplary" in publishing its foreign exchange market intervention.

The Reserve Bank of India (RBI) has noted that the value of the rupee is broadly market-determined, with intervention used only during "episodes of undue volatility," it said.

According to the authorities' data, India was generally a net purchaser of foreign exchange from late 2013 to the middle of 2017, as the RBI sought to gradually build a stronger external buffer in the aftermath of the May 2013 "taper tantrum".

Purchases accelerated in the first half of 2017 amidst strong portfolio inflows to India (and many other emerging markets); as a result, cumulative net purchases of foreign exchange exceeded two per cent of the GDP over 2017, it said.

Noting that foreign exchange purchases generally declined in the second half of 2017, and the RBI shifted to selling foreign exchange in the first half of 2018, the Treasury said net purchases of foreign exchange over the past four quarters through June totalled USD 4 billion (0.2 per cent of the GDP), including activity in the forward market.

"Sales of foreign exchange in the first half of this year came in the context of foreign portfolio outflows of USD seven billion, as India experienced outflows (particularly of foreign portfolio debt) that were witnessed across many emerging markets in the second quarter," it said.

This mirrored the pattern of the last few years, in which intervention has typically tracked institutional portfolio flows. India maintains ample reserves according to the IMF metrics for reserve adequacy, particularly given that India maintains some controls on both inbound and outbound flows of private capital.

As of June 2018, foreign currency reserves stood at USD 380 billion, equal to 3.7 times gross short-term external debt, 8 months of import cover, and 14 per cent of the GDP.

"The rupee depreciated 7 per cent against the dollar in the first half of the year, while the real effective exchange rate also reversed its general uptrend from the last few years, depreciating by four per cent," it said.

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News Network
January 19,2020

President Donald Trump gave a new justification for killing Qassim Suleimani, telling a gathering of Republican donors that the top Iranian general was "saying bad things about our country" before the strike, which led to his decision to authorise his killing. "How much are we going to listen to?" Trump said on Friday, according to remarks from a fundraiser obtained by CNN.

With his typical dramatic flourish, Trump recounted the scene as he monitored the strikes from the White House Situation Room when Suleimani was killed. The president spoke in a ballroom at his Mar-a-Lago club in Palm Beach, Florida, at a Republican event that raised $10 million for Trump's 2020 campaign.

The January 3 killing of Suleimani prompted Iran to retaliate with missile strikes against US forces in Iraq days later and almost triggered a broad war between the two countries. "They're together sir," Trump said military officials told him. "Sir, they have two minutes and 11 seconds. No emotion. Two minutes and 11 seconds to live, sir. They're in the car, they're in an armoured vehicle. Sir, they have approximately one minute to live, sir. Thirty seconds. Ten, 9, 8 ...'"

"Then all of a sudden, boom," he said. "They're gone, sir. Cutting off, I said, where is this guy?" Trump continued. "That was the last I heard from him". It was the most detailed account that Trump has given of the drone strike, which has drawn criticism from some US lawmakers because neither the president nor his advisers have provided public information to back up their statements that Suleimani presented an "imminent" threat to US.

Trump's comments came a day after he warned Iran's supreme leader Ayatollah Ali Khamenei to be "very careful with his words". According to Trump, Khamenei's speech on Friday, in which he attacked the "vicious" US and described UK, France and Germany as "America's lackeys", was a mistake.

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News Network
February 12,2020

Feb 12: China on Wednesday reported another drop in the number of new cases of a viral infection and 97 more deaths, pushing the total dead past 1,100 as postal services worldwide said delivery was being affected by the cancellation of many flights to China.

The National Health Commission said 2,015 new cases had been reported over the last 24 hours, declining for a second day. The total number of cases in mainland China reached 44,653, although many experts say a large number of others infected have gone uncounted.

The additional deaths raised the mainland toll to 1,113. Two people have died elsewhere, one in Hong Kong and one in the Philippines.

In the port city of Tianjin, just southeast of Beijing, a cluster of cases has been traced to a department store in Baodi district. One-third of Tianjin’s 104 confirmed cases are in Baodi, the Xinhua state news agency reported.

A salesperson working in the store’s small home appliance section became the first individual in the cluster to be diagnosed on Jan. 31, Xinhua said. The store was already closed at that point, then disinfected on Feb. 1. Nevertheless, several more diagnoses soon followed.

The next to have their infections confirmed were also salespeople at the store. They had not visited Wuhan recently and, with the exception of one married couple, the patients worked in different sections of the store and did not know one another, according to Xinhua.

Japan’s Health Ministry said that 39 new cases have been confirmed on a cruise ship quarantined at Yokohama, bringing the total to 174 on the Diamond Princess.

The U.S. Postal Service said that it was “experiencing significant difficulties” in dispatching letters, parcels and express mail to China, including Hong Kong and Macau.

Both the U.S. and Singapore Post said in notes to their global counterparts that they are no longer accepting items destined for China, “until sufficient transport capacity becomes available.”

The Chinese mail service, China Post, said it was disinfecting postal offices, processing centers and vehicles to ensure the virus doesn’t spread via the mail and to protect staff.

It said the crisis is also impacting mail that transits China to other destinations including North Korea, Kazakhstan, Kyrgyzstan, Mongolia, Tajikistan, Turkmenistan, Uzbekistan and Vietnam.

The World Health Organization has named the disease caused by the virus as COVID-19, avoiding any animal or geographic designation to avoid stigmatization and to show the illness comes from a new coronavirus discovered in 2019.

The illness was first reported in December and connected to a food market in the central Chinese city of Wuhan, where the outbreak has largely been concentrated.

Zhong Nanshan, a leading Chinese epidemiologist, said that while the virus outbreak in China may peak this month, the situation at the center of the crisis remains more challenging.

“We still need more time of hard working in Wuhan,” he said, describing the isolation of infected patients there a priority.

“We have to stop more people from being infected,” he said. “The problem of human-to-human transmission has not yet been resolved.”

Without enough facilities to handle the number of cases, Wuhan has been building prefabricated hospitals and converting a gym and other large spaces to house patients and try to isolate them from others.

China’s official media reported Tuesday that the top health officials in Hubei province, of which Wuhan is the capital, have been relieved of their duties. No reasons were given, although the province’s initial response was deemed slow and ineffective. Speculation that higher-level officials could be sacked has simmered, but doing so could spark political infighting and be a tacit admission of responsibility.

The virus outbreak has become the latest political challenge for the party and its leader, Xi Jinping, who despite accruing more political power than any Chinese leader since Mao Zedong, has struggled to handle crises on multiple fronts. These include a sharply slowing domestic economy, the trade war with the U.S. and pushback on China’s increasingly aggressive foreign policies.

China is struggling to restart its economy after the annual Lunar New Year holiday was extended to try to curb the spread of the virus. About 60 million people are under virtual quarantine and many others are still working at home.

In Hong Kong, the diagnosis of four people living in an apartment building prompted worried comparisons with the deadly SARS pandemic of 17 years ago.

More than 100 people were evacuated from the building after a 62-year-old woman diagnosed with the virus was found living 10 floors directly below a man who was earlier confirmed with the virus.

Health officials called it a precautionary measure and sought to assuage fears of an epidemic, dismissing similarities to the SARS community outbreak at the Amoy Gardens housing estate in 2003.

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News Network
April 15,2020

Seoul, Apr 15: Wearing masks and gloves, South Korean voters cast their ballots on Wednesday to elect 300 parliamentary lawmakers amid the coronavirus outbreak.

Voting kicked off at 6 am (local time) and was to run until 6 pm (local time) at 14,330 polling stations across the country, according to the National Election Commission (NEC). The number of eligible voters is 44 million, according to Yonhap news agency.

The once-in-four-years legislative election is widely seen as a referendum on President Moon Jae-in, whose five-year term will end in mid-2022, as well as a test of the country's fight against COVID-19 under the leadership of Moon, The Strait Times reported.

South Korea has received international praise for its massive testing capability and other innovative measures, such as drive-through testing and high-tech contact tracing.

Experts, therefore, expect the ruling Democratic Party (DP) to extend its lead in Parliament, given that the government's handling of the virus outbreak is viewed positively both at home and abroad, as per The Strait Times.

At least 10,564 people in the country have been infected by coronavirus, which has claimed 222 lives. About 2,800 patients are undergoing treatment.

The number of new cases has fallen from a high of 813 on February 29 to below 50 for six days in a row as an intensive social distancing campaign that started on March 21 remained in place.

Several surveys cited by the newspaper also showed that voters consider the pandemic as the biggest factor in their decision. A recent poll showed that 72.6 per cent of respondents rated the government's response to the outbreak as positive.

The NEC has said that public safety at polling stations will be a priority to prevent any possible spread of the virus.

All 14,330 polling stations and 251 counting stations will be disinfected on polling day, the NEC was quoted.

Voters will undergo temperature screening and those registering temperatures of 37.5 degrees Celsius or higher or display respiratory symptoms will have to exercise their franchise at a separate booth.

Tuesday was the last of 13 days of campaigning, which saw most candidates reducing their ground activities and face-to-face encounters with voters. Instead, the candidates boosted their online presence with videos and social media engagements in a bid to win votes, according to The Strait Times.

In addition, the government has also decided to temporarily lift quarantine rules to permit self-isolators to vote in the elections. Some 50,000 people in self-isolation who have no symptoms and expressed a willingness to vote will be allowed to cast ballots after the regular voting ends in the evening.

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