Forex dealers said apart from month-end demand for the American currency from importers, dollar's gains against other currencies overseas amid US data showing more-than-expected economic growth in the second quarter also put pressure on the local unit.
Macroeconomic management is usually a lot more comfortable with lower fiscal deficits. The sooner we get there, the better for the economy, says former Chief Economic Adviser to the Government of India Shankar Acharya.
Spiralling prices pinched the pocket of consumer as edible oil, fuel and many other commodities turned dearer this year amid pandemic-induced disruptions but the inflationary pressure is anticipated to ease, though marginally, in the coming months. As consumers, at retail as well as wholesale levels, are willy-nilly learning to live with the new normal of curbs to contain the spread of coronavirus infections, experts are of the view that elevated inflation is likely to stay longer. After dealing with the devastating blows from the second COVID wave, especially during the April-June period, the economy is well on the revival path but the emergence of Omicron might unsettle the recovery trajectory in the short term.
The decision has been taken after a preliminary inquiry conducted by the home ministry found that the NGO was carrying out activities contrary to the Foreign Contribution Regulations Act under which it has to function.
'When an institution believes its knowledge and capability is superior to everyone, it behaves like a frog in the well.' 'And this is precisely the cause for the mess,' says J N Gupta.
The rupee had dipped by a massive 67 paise to an all-time closing low of 61.10 against the dollar on Friday.
With pricing power of producers unlikely to strengthen and commodities ex-crude oil likely to remain sluggish in the immediate term, the core-WPI inflation may remain sub-zero in the rest of this calendar year.
India's current account deficit is expected to deteriorate in the current fiscal on account of costlier imports and tepid merchandise exports, according to the Finance Ministry's monthly economic review. The review released on Thursday by the ministry also said that global headwinds would continue to pose a downside risk to growth as crude oil and edibles, which have driven inflation in India, remain major imported components in the consumption basket. For the present, it said, "their global prices have softened, as fears of recession have dampened prices somewhat. This would weaken inflationary pressures in India and rein in inflation."
Since mid-July, the RBI has taken steps to tighten cash conditions, which have failed to support the rupee but sent bond yields surging, posing a fresh threat to the already cooling economy.
Money permits patronage. Money means power. No wonder details of the crores locked up in NPAs and never repaid loans are top secret, Sunanda K Datta-Ray.
RBI has, since January, cut its policy rate four times.
Firms hired additional hands to keep up with the production demand
The Nikkei India Services PMI posted above the critical 50.0 level, which separates growth from contraction, for the fourth month running in May.
India received $70 billion in remittances during 2014.
The moves by the RBI, announced late on Wednesday, should increase supplies of gold and brighten the earnings outlook for jewellery makers after the government took tough measures to curb imports last year, analysts said.
The domestic currency hovered in a range of 60.59-60.85 per dollar during the late morning deals.
In the mid-quarter monetary policy review last month, RBI Governor Raghuram Rajan had left the key policy rate unchanged, after raising it 50 bps in two instalments since he took over on September 4, saying he was waiting for more data clarity.
'Yet the market didn't do all that badly because it was cushioned by domestic inflows.'
Over the past few months, macro parameters have improved.
Besides, a higher opening in the domestic equity market and strengthening of the euro against the dollar overseas supported the local currency, forex dealers said.
India's record current account deficit has been a key reason behind why Standard & Poor's and Fitch Ratings cut their outlooks on the country's sovereign rating to 'negative' last year.
HDFC Bank was the top loser in the Sensex pack, shedding over 2 per cent, followed by Kotak Bank, Bajaj Finserv, Maruti, Titan, SBI, HUL, HDFC and Tata Steel. On the other hand, Bharti Airtel, M&M, NTPC, Tech Mahindra, Sun Pharma and PowerGrid were among the gainers.
However, if the rupee depreciates much, the economy in dollar terms would be that much smaller.
Dollar flows in domestic markets are expected to continue but state-run banks are seen mopping the flows to boost RBI's foreign exchange kitty.
Although the RBI is not statutorily independent from the government, Rajan, like previous RBI Governors, has long valued his independence.
If we accept that there is a challenge in Punjab today, any realistic progress can only be made if the rest of the country, especially the government and the ruling party, engage with this sense of grievance, points out Shekhar Gupta
The Lok Sabha on Tuesday passed the Constitution amendment bill to restore the power of states to make their own OBC lists after a thaw in the logjam as Opposition parties backed the legislation but demanded the removal of the 50 per cent cap on reservation, with many of them also calling for a caste-based census.
RBI may hold rates steady as economic parametes are going strong, say experts.
sharper-than-expected economic recovery back home, analysts say, can fuel a further rally in domestic cyclicals, industrials, and financials as global central banks continue with their easy money policy.
During March, the rate of inflation slowed to the weakest in four months and was below the long-run survey average
The finance minister chided the central bank on Tuesday over its focus on fighting inflation, saying the Reserve Bank of India (RBI) also needed to abide by the government policy to promote economic growth.
Given the many policy areas where the Centre and the states have not been seeing eye to eye in the last few years, it is time the Modi government convenes a meeting of the Inter-State Council, recommends A K Bhattacharya.
If net forex outflows turn out to be relatively high in the next few years, the rupee could depreciate beyond Rs 80 to a dollar by 2022. The causal reasons could, for example, include unmet expectations of FPI and FDI investors about the performance of the Indian economy, sharp rise in prices of imported oil and decrease in FX remittances. The RBI has to ask itself whether guaranteeing future rupee-dollar exchange rates on FX forward contracts is a reasonable way to use its risk-bearing capacity, says Jaimini Bhagwati.
RBI is expected to cut policy rates by 50 basis points by 2016.
An NBFC must actively manage its collateral positions, differentiating between encumbered and unencumbered assets, and monitor such assets so that they can be mobilised in a timely manner, central bank says in circular.
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Sentiments turned buoyant after RBI on Monday cut the marginal standing facility rate, at which it lends emergency funds to banks, by 0.5 per cent to 9 per cent with an aim to improve liquidity and boost economic activities.
Chief Economic Adviser K V Subramanian on Friday said there is an "upside potential" in the estimates about the economy during the current financial year amid a faster-than-expected recovery. He said the final print could be better than GDP estimates given by various institutions, including the Reserve Bank of India, which projected contraction of 9.5 per cent during 2020-21. During the second quarter, India's economy recovered faster than expected as a pick-up in manufacturing helped GDP clock a lower contraction of 7.5 per cent and held out hopes for further improvement on consumer demand bouncing back.
On the present government's 'Make in India' campaign, C Rangarajan, former chairman of the Prime Minister's Economic Advisory Council, says it is important to first ask for whom it is being made.
Short-term capital gains tax of 30% is likely to be levied if bitcoin is held for less than three years and 20% if held for longer than 36 months.
The Committee, which has been set up in pursuance of the announcement made by the Minister in his Budget speech, will also suggest whether the unclaimed deposit should come to government or be kept in a separate account.
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