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Showing posts from August, 2013

In his last speech, RBI Governor Subbarao blames UPA for mess Indian rupee, economy is in

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Prime Minister Manmohan Singh and RBI Governor D Subbarao (L) at a press meet. PTI

In his last speech before retiring as the Reserve Bank of India (RBI) Governor and handing over the reins to Raghuram Rajan, D Subbarao highlights fact that the Indian rupee is not free falling and the economy is not sinking because of him. In fact, he turns on the Manmohan Singh-led government and roundly slams it for its policies.
Editorial: Evaluating Subbarao Subbarao was sharply critical of the government, blaming its "loose fiscal stance" for the current economic woes, and warned that the root cause of Indian rupee depreciation is "domestic structural factors." While the speed and timing of the Indian rupee's depreciation was due to the markets reacting to US Fed announcements, Subbarao said, "We will go astray, both in the diagnosis and remedy, if we do not acknowledge that the root cause of the problem is domestic structural factors." India's external vulnerabi…

Yasin Bhatkal arrested; what next for India Mujahideen?

New Delhi: Yasin Bhatkal's arrest is definitely one of the most significant operations by the security agencies in recent times and Indian Mujahideen's co-founder is, without any doubt, a big catch. 

A key suspect in a series of bomb blasts in India, Bhatkal, alias, Muhammad Ahmad Zarar Siddibapa, was arrested from the Indo-Nepal border. What added to the significance of the arrest is the fact that a close aide of Bhatkal, Asadullah Akhtar alias Haddi, was also apprehended by the security agencies – an operation which is said to have been jointly carried out by the IB, RAW and the Bihar Police. 

Thus, the arrest of Bhatkal is a major blow to the IM and its terror network in India. The masterminds of the IM sitting in Pakistan would also be hit, as they were the ones pulling the strings of IM's terror activities in India. Though Pakistan has time and again denied, it is a known fact that IM has the blessings of the authorities there, including the ISI. 
Hailing from Uttara Kan…

Sorry Chidu, you are as responsible as Pranab

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It is never a good idea to spit against the wind. And yet, P Chidambaram tries to do precisely that. He has been repeatedly telling us that the rupee is undervalued at a time when the global winds are blowing against us. He is being proved wrong on a daily basis. On Wednesday (28 August), as the rupee breached 68 to the US dollar in the face of global uncertainties, including the building confrontation with Syria, Chidambaram was again quoted in the media as saying the rupee is undervalued. The fact is currencies have a price based on demand and supply. The only relevant value for any currency is the one you get when you want to buy or sell it. And right now there are more sellers for the rupee and buyers for the dollar than Chidambaram would like. The rupee will correct when the sentiment reverses, and till that time Chidambaram must focus on doing what is right for the economy and not give daily opinions on the right price for the rupee. There is no correct price. The Economic Times …

Rupee pushes 70: Why Chidu’s 10-point plan will be a flop

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As Finance Minister Palaniappan Chidambaram stood up in Parliament on Tuesday and made a fervent pitch to the Lok Sabha to support his 10-point action plan, it became amply clear that the embattled FM had absolutely nothing new to say. His 10-point plan was a rehash of a to-do list which every single economist, policymaker and analyst worth anything already knows. From motherhood statements like the need to rein in the fiscal and current account deficits to recapitalising public sector banks, reviving the investment cycle, adding to the foreign exchange reserves, encouraging manufacturing and exports, Chidambaram talked of things which should have already been done, rather than figuring in a list at the fag end of the United Progressive Alliance (UPA) government’s second term in office. It was no surprise, then, that the very next day, the rupee promptly crashed to its lowest ever, and is now within kissing distance of the 69-mark. And despite the government’s obvious displeasure earl…

Rupee closes in on 69 per $; could touch 70 mark next

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The  rupee slumped to a record low near 69 to the dollar on August 28 on growing worries that foreign investors will continue to sell out of a country facing stiff economic challenges and volatile global markets. The pummelling in markets sent the rupee reeling 3.7% to an all-time low of 68.85 with the unit closing just a touch off that, at 68.80/81 per dollar, its biggest single-day fall since October 1995. It closed on Tuesday at 66.24/25. In absolute terms too, the 256-basis-point fall in the rupee was the biggest ever. An assault on the psychologically key 70 level now appears imminent, as intervention from the Reserve Bank of India (RBI) seen mid-morning only gave the rupee a brief respite. In the stock market, state-run Life Insurance Corp, which was spotted buying shares, allowed the domestic benchmark index to erase steep early losses and end the day stronger. "If steps are not taken to implement the reforms necessary to tackle the structural issues, the government will …

Biggest fall of Indian rupee in 18 years

The rupee slumped to a record low near 69 to the dollar on August 28 on growing worries that foreign investors will continue to sell out of a country facing stiff economic challenges and volatile global markets.

The pummeling in markets sent the rupee reeling 3.7 per cent to an all-time low of 68.85 with the unit closing just a touch off that, at 68.80/81 per dollar, its biggest single-day fall since October 1995.

It closed on Tuesday at 66.24/25.

In absolute terms too, the 256-basis-point fall in the rupee was the biggest ever.

An assault on the psychologically key 70 level now appears imminent, as intervention from the central bank seen mid-morning only gave the rupee a brief respite.

In the stock market, state-run Life Insurance Corp, which was spotted buying shares, allowed the domestic benchmark index to erase steep early losses and end the day stronger.

"If steps are not taken to implement the reforms necessary to tackle the structural issues, the government will be left with the…

Gold hits record high of Rs 34,500 on weak rupee, global cues

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New Delhi, Aug 28 (PTI) Surpassing all previous records, gold scaled to a new peak of Rs 34,500 per 10 grams in the bullion market on August 28 as the rupee hit a new intra-day record low of 68.75 per dollar amid a firm global trend.

However, late selling by stockists reduced the initial gains and the yellow metal closed with a biggest ever single-day gain of Rs 1,900 to Rs 33,900 per 10 grams.

Rupee ends at 68.83 against dollar

Updated: Wed, Aug 28 2013. 05 49 PM IST Mumbai: The rupee plunged to a new low on August 28, towards the 69 mark, on concerns of a possible flight of capital from Asia’s third largest economy and escalation in tensions in global markets. Heavy dollar demand in the foreign exchange market, mostly panic-driven, negated the impact of Reserve Bank of India’s (RBI’s) interventions to support the rupee, dealers said. The currency ended the day at 68.83 to the dollar, down 3.83% from its previous close, after touching a new lifetime low of 68.85. This is the biggest daily decline in 20 years. Earlier in the day, the rupee partially recovered tracking the recovery in equity markets and on speculation that the central bank had intervened to support the currency. Stop-loss transactions were triggered at near 68.75 per dollar, Bloomberg reported, citing two traders who asked not to be named as the information isn’t public. But the currency couldn’t sustain the gains. “The recovery in the equity m…

Now, man whose report cleared IAS officer Durga Shakti Nagpal is transferred

LucknowRavikant Singh, the District Magistrate who had cleared IAS officer Durga Shakti Nagpal in a report, has now been transferred. 

Mr Singh recieved transfer orders even as speculation gained ground that the suspension of Ms Nagpal, 28, might be revoked after she met Samajwadi Party chief Mulayam Singh Yadav and presented he case. 

Ms Nagpal had been suspended on the charge of ordering the demolition of the wall of a mosque under construction on government land in a Noida village during the holy month of Ramzan. The Uttar Pradesh government said it feared communal tension as a result of her alleged action. 

Ravikant Singh, as the District Magistrate of Gautam Budh Nagar and Ms Nagpal's boss, conducted an inquiry and concluded in his report to the Uttar Pradesh government that the wall was demolished by the villagers themselves and that no government machine was deployed to pull it down. 

No official reason has been given for Mr Singh's transfer. It comes after villagers at S…

Sensex recovers from 3 pct loss; LIC buys shares

(Reuters) - The BSE Sensex ended flat on Wednesday, recovering from a nearly 3 percent fall earlier in the session, led by gains in software services exporters such as Tata Consultancy Services, while banks recovered on value buying. Life Insurance Corporation was also spotted buying shares, two dealers told Reuters, helping spark a recovery in shares. India's state-run insurer is often seen as a buyer that will step in to buy shares when markets are tumbling. The rupee slumped to a record low below 68 to the dollar on growing worries that foreign investors will continue to sell out of a country facing stiff economic challenges and volatile global markets. Foreign institutional investors (FIIs) sold about $1 billion worth of shares in the previous eight sessions through Tuesday, with global sentiment weakening further amid uncertainty about the prospect of U.S.-led military action against the Syrian government. "On bottom-up basis, India remains overweight, but on top-down b…

FM Chidambaram blames Pranab Mukherjee for the dire state of the economy

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NEW DELHI: For the second time in less than a week, Finance Minister P Chidambaram appeared to blame his predecessor Pranab Mukherjee, now the President of India, for the dire state of the economy even as stock markets plunged and the rupee fell to another record low. 

Shifting tack from his usual theme of blaming the global environment, Chidambaram admitted domestic problems had also contributed to the economy's travails. These domestic problems, the minister told the Rajya Sabha, originated, at least in part, during the tenure of his predecessor. 

"There are not just external factors, there are also domestic factors. One of the domestic factors is that we allowed fiscal deficit to be breached and we allowed current account deficit to swell because of certain decisions that we took during the period 2009 to 2011," the FM said in the Rajya Sabha. 

Chidambaram Lists Economic Ills

Chidambaram spoke in the Rajya Sabha during question hour even as the rupee posted its steepest f…