Rupee turns into Asia's worst emerging market currency as funds shun India

Agencies
December 21, 2021

The Indian rupee is set to end a tumultuous year as Asia’s worst-performing emerging market currency with foreign funds fleeing the nation’s stocks.

The currency declined 1.9 per cent this quarter as global funds pulled $4.2 billion of capital out of the country’s stock market, the most among regional markets where data is available.

Foreigners sold Indian stocks as Goldman Sachs Group Inc. and Nomura Holdings Inc. recently lowered their outlook for equities, citing lofty valuations, at a time when concerns about the Omicron variant are roiling the global markets. Record-high trade deficit and the central bank’s policy divergence with the Federal Reserve have also impinged on the rupee’s carry appeal.

“The monetary policy divergence and widening current account gap have set depreciation in the rupee in the near term,” said B. Prasanna, head of global markets, sales, trading and research at ICICI Bank Ltd in Mumbai.

Depreciation in rupee is a double-edged sword for the Reserve Bank of India. While a weaker currency may support exports amid a nascent economic recovery from the pandemic, it also poses risk of imported inflation, and may make it difficult for the central bank to maintain interest rates at a record low for longer.

QuantArt Market Solutions expects the rupee to decline to 78 per dollar by end-March, falling past the previous record low of 76.9088 reached in April 2020, while a Bloomberg survey of traders and analysts forecast the rupee at 76.50. The rupee is set to drop about 4 per cent this year in a fourth straight year of losses.

Stocks on the edge

Foreign exodus from stocks have led to the benchmark S&P BSE Sensex Index falling by about 10 per cent below an all-time high touched in October. Despite that, the one-year forward price-to-earnings ratio for the Sensex is near 21, compared to 12 for MSCI’s Emerging Markets Index, meaning there’s room for the equities to fall even further. Bonds have seen $587 million of outflows this quarter.

Bearish rupee calls are rising as India’s trade deficit widened to an all-time high of about $23 billion in November amid higher imports. The ample liquidity in the banking system, partly created by the RBI’s dollar purchases, may make it difficult for the central bank to intervene to the same extent in 2022 to curb rupee’s losses, according to Goldman Sachs. 

Still, not all are pessimistic. A likely reversal in foreign inflows in the coming quarter on account of share sales in companies including Life Insurance Corp. of India, billed as India’s biggest initial public offer, may cushion the rupee, according to UBS AG.

The rupee gained 0.4 per cent on Tuesday to 75.63 per dollar, helping pare the recent declines.

Beyond the temporary spike in dollar/rupee expected in the next four-to-six weeks, “we see the one-off flows and supportive 1Q current-account seasonality to come at play,” said Rohit Arora, emerging market Asia strategist at UBS. “As long as oil remains tamed, rupee should end the fiscal year below current levels possibly in 74-75 range.”

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News Network
November 17,2024

Mangaluru: District-in-Charge Minister and Minister for Health and Family Welfare, Dinesh Gundu Rao, announced that a day-care chemotherapy centre will soon be established at District Wenlock Hospital. Speaking to mediapersons after reviewing the activities at Wenlock and Government Lady Goschen Hospital, he shared the government’s plans to enhance healthcare services in the region.

Key Initiatives Announced

•    Day-Care Chemotherapy Centre:

  • Ten beds will be reserved for cancer patients.
  • The government will collaborate with Yenepoya Hospital to provide chemotherapy treatments.
  • All required facilities for the centre are already in place, awaiting inauguration by the Chief Minister.

•    Wenlock Hospital Facelift:

  • Critical Care Block: To be built at a cost of ₹24 crore.
  • Integrated Public Health (IPH) Lab: Planned with a budget of ₹1 crore.
  • New OPD Block: As per a 2017 agreement, KMC Hospital will take up construction. Discussions with KMC management are underway.

•    Additional Requirements:

  • A new mortuary and post-mortem building.
  • Paramedical college building.
  • Modern kitchen.
  • Bridge connecting two buildings within the hospital.

•    Total facelift cost: ₹6 crore to ₹10 crore, utilizing funds from the Department of Health and Family Welfare and CSR contributions.

•    Timeline:
By December or January, priority works will be finalized. The superintendents of Wenlock and Lady Goschen Hospitals are scheduled to visit Bengaluru next week to discuss these projects.

•    MRI Fee Allegations:
The minister assured that allegations of patients being charged for MRI scans at Wenlock Hospital will be resolved at the earliest.
These measures aim to improve healthcare accessibility and infrastructure, positioning Wenlock Hospital as a state-of-the-art facility in the region.

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News Network
November 21,2024

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The International Criminal Court (ICC) has issued arrest warrants for Israeli prime minister Benjamin Netanyahu and his former minister of military affairs Yoav Gallant over war crimes against Palestinians in the Gaza Strip.

The court’s Pre-Trial Chamber I issued warrants of arrest for Netanyahu and Gallant "for crimes against humanity and war crimes committed from at least 8 October 2023 until at least 20 May 2024, the day the Prosecution filed the applications for warrants of arrest”, it confirmed in a statement Thursday.

It is the first instance in the court's 22-year history it has issued arrest warrants for Western-allied senior officials.

In its statement, the ICC's Pre-Trial Chamber I, a panel of three judges, said it has rejected appeals by Israel challenging its jurisdiction. 

The chamber said it has decided to release the arrest warrants because "conduct similar to that addressed in the warrant of arrest appears to be ongoing", referring to Israel's ongoing onslaught on Gaza.

Netanyahu and Gallant, it said, “each bear criminal responsibility” for “the war crime of starvation as a method of warfare; and the crimes against humanity of murder, persecution, and other inhumane acts,” as well as “intentionally directing an attack against the civilian population.”

All 124 states that signed the Rome Statute, the treaty that established the court, are now under an obligation to arrest the wanted individuals and hand them over to the ICC in the Hague. 

The court relies on the cooperation of member states to arrest and surrender suspects. The Netherlands' foreign minister quickly said his country was prepared to enforce the warrants while 93 nations earlier reiterated their support for the ICC.

Triestino Mariniello, a lawyer representing Palestinian victims at the ICC, called the warrants "a historic decision".

He noted that the court had endured "pressure and threats of sanctions" from the US government, but acted nonetheless.

As expected, the Tel Aviv regime rejected the rulings, with its security minister Itamar Ben Gvir calling the warrants “anti-Semitic through and through.”

The ICC said Israel’s acceptance of the court’s jurisdiction was not required.

Israel and its major ally, the United States, are not members of the court. 

Israel unleashed its bloody Gaza onslaught on October 7, 2023. So far, it has killed at least 43,985 Palestinians, mostly women and children, and injured 104,092 others, according to the Gaza Health Ministry.

Israel faces an ongoing South Africa-led genocide case at the International Court of Justice (ICJ).

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News Network
November 21,2024

palestainetragedy.jpg

Hamas says the Israeli regime’s sole objective lies in “erasing” the entirety of the Palestinian population from across the Palestinian territories.

Khalil al-Hayya, a ranking official with the Gaza Strip-based Palestinian resistance movement, made the remarks to the Palestinian al-Aqsa TV on Wednesday.

“The occupation targets everyone—it strikes hospitals, civil defense, women, children, and the elderly,” he said, adding that the regime sought to “empty Gaza of its residents, and displace the Palestinian people to fulfill its dreams of building a Zionist Jewish state across all of Palestine.”

The remarks came amid the regime’s October 2023-present war of genocide on the coastal sliver that has so far claimed the lives of nearly 44,000 Palestinians, mostly women and children.

“This unprecedented aggression in modern times evokes scenes from the dark ages of human history, having crossed all red lines and exceeded every expectation of brutality in the modern era,” the Palestinian official lamented.

He also regretted that the regime had added “systematic and dangerous starvation to its aggression, falsely claiming before the world that it allows 250 [aid] trucks into Gaza daily. In reality, the number of trucks is far fewer.”

Hayya, meanwhile, regretted that “scenes of children torn apart, women screaming over their children, and heart-wrenching destruction have failed to stir enough humanity to stop these crimes.”

He decried the United States for vetoing the United Nations Security Council’s resolutions that are aimed at bringing about a potential ceasefire in the war, saying this indicated Washington’s “partnership in the aggression” and a simultaneous siege that the Israeli regime has been enforcing on Gaza.

Addressing Israeli Prime Minister Benjamin Netanyahu, the official asserted that, despite what the Israeli official is after, Hamas would not hand over the regime’s captives “without [the regime’s] stopping the war.”

He called Netanyahu “the main obstacle” in the way of cessation of the aggression, saying the Israeli premier “blocks any progress for political reasons,” and citing his preventing conclusion of a ceasefire agreement in July.

Hayya also warned that the regime sought to expand the war beyond Gaza, but asserted that its goals are “impossible and will never happen.”

“Today, the enemy exposes its true intentions of extermination and displacement, but it will fail,” he stressed.

“The Palestinian people are resilient and will not surrender, as they believe in their humanitarian and political cause. The enemy and its allies will not succeed in achieving their goals. This steadfast people will endure, and the occupation will not prevail against them.”

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