Rupee at record-low despite India spending $100 billion to defend currency

News Network
September 23, 2022

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New Delhi, Sept 23: India has spent nearly $100 billion in the past year to defend the rupee in a battle that has so far failed to staunch the local currency’s drop to a record low against the dollar on Friday.

Data from the Reserve Bank of India (RBI) showed that the country’s forex reserves have fallen to $545.7 billion as of September 16, from $550.8 billion a week ago, and a far cry from the $642.45 billion seen exactly a year ago. The reading is the lowest since October 2, 2020. 

To be sure, some of the drop is also due to revaluation changes, given the dollar’s move upwards. 

“The fall in reserves is a combination of factors such as intervention, balance of payments deficit, and the revaluation of reserves held in other currencies vis-a-vis the US dollar,” said Aditi Nayar, chief economist at ICRA in New Delhi. 

India’s currency fell to a record low 81 a dollar and has lost over 8 per cent so far this year against the greenback. The dollar has surged to a two-decade high against major currencies after the Federal Reserve signaled a longer-than-expected tightening cycle. 

The data comes as RBI has mounted a strong defense in the last few weeks to soothe market fears over further currency losses. The decline in the rupee is also raising worries with impact seen on inflation, external deficits and company profits. 

“You buy an umbrella to use it when it rains,” RBI Governor Shaktikanta Das said earlier in July, indicating that the central bank had been using foreign exchange reserves to deal with currency volatility.

While India’s forex buffer should be sufficient to shield the economy against any major external shock, we expect the RBI to become more prudent in the latter part of the current fiscal year, Kotak Mahindra Bank economists lead by Upasna Bhardwaj wrote in a note. 

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News Network
September 19,2022

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Kolkata, Sept 19: West Bengal Chief Minister Mamata Banerjee on Monday said she doesn't believe that Prime Minister Narendra Modi is behind the alleged excesses of central agencies in the state and blamed a section of the BJP leaders for misusing them to serve their interests.

Banerjee, who was speaking on a resolution in the Assembly against the “excesses” of the central probe agencies, urged the Prime Minister to ensure that the agenda of the union government and the interests of his party do not get mixed up.

The BJP opposed the resolution which was later passed by the Assembly.

"The present union government is behaving in a dictatorial way. This resolution is not against anyone in particular, but against the biased functioning of the central agencies," Banerjee, also the Trinamool Congress supremo, said.

Leader of the Opposition Suvendu Adhikari said such a "resolution against the CBI and ED" is against the rules and regulations of the Assembly.

The resolution was passed through division, with 189 voting in favour of it and 69 against.

Central agencies such as CBI and ED are probing into several cases in the state, in which senior TMC leaders are accused. 

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News Network
September 28,2022

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The Prime Minister Narendra Modi-led government of India on Wednesday, September 28, banned Popular Front of India (PFI) and its seven affiliates for five years charging it of being involved in "several criminal and terror cases" and having links with the terror outfit Islamic State of Iraq and Syria (ISIS).

The Ministry of Home Affairs (MHA) issued the notification at 5:43 am based on recommendations from BJP-ruled states Uttar Pradesh, Karnataka and Gujarat. The move comes days after multi-agency raids led by NIA led to the arrest or detention of over 350 activists and leaders.

Besides PFI, the affiliates that were banned under the Unlawful Activities (Prevention) Act, 1967 are Rehab India Foundation (RIF), Campus Front of India (CFI), All India Imams Council (AIIC), National Confederation of Human Rights Organisation (NCHRO), National Women’s Front, Junior Front, Empower India Foundation and Rehab India Foundation.

The Centre justified its ban in the notification, saying that if there is "no immediate curb or control of unlawful activities of the PFI and its affiliates or fronts, the PFI and its associates, it will use the opportunity to "continue its subversive activities" disturbing the constitutional set up of the country.

If there is no ban, the notification said, it will also encourage and enforce terror based regressive regime, allow propagating anti-national sentiments and radicalise a particular section of society with the intention to create disaffection against the country and aggravate activities which are detrimental to the integrity, security and sovereignty of the country.

The PFI and its affiliates "operate openly as socio-economic, educational and political organisations but they have been pursuing a secret agenda to radicalise a particular section of the society working towards undermining the concept of democracy and showing sheer disrespect towards the constitutional authority and constitutional set up of the country", it said.

With funds and ideological support from outside, it said, it has become a "major threat" to internal security. The PFI’s founding members were the leaders of banned Students Islamic Movement of India (SIMI).

The notification cited a number of incidents of "violent and subversive acts" carried out by the PFI, including that of chopping off the hands of Prof TJ Joseph in Kerala and cold blooded killings of a college student Abhimany in Kerala and youths Sharath, R Rudresh, Praveen Pujari and Praveen Nettaru, all from Karnataka between 2016 and 2022.

"Criminal activities and brutal murders have been carried out by PFI cadres for the sole objective of disturbing public peace and tranquility and creating reign of terror in public mind," the notification said.

The MHA also spoke about PFI's links with global terrorist groups and instances of its activists joining ISIS and participating in terror acts in Syria, Afghanistan and Iraq. Some of these PFI cadres linked to ISIS have been killed in these conflict theaters and some have been arrested by state police and central agencies while the PFI also has links with Jamat-ul-Mujahideen Bangladesh (JMB), a proscribed terrorist organization.

The leaders and cadres of the PFI are also accused of conspiring and raising funds from within the country and abroad through the banking channels, and the hawala, donations, etc. as part of a "well-crafted criminal conspiracy, and then transferring, layering and integrating these funds through multiple accounts to project them as legitimate and eventually using these funds to carry out various criminal, unlawful and terrorist activities".

The notification also said the sources of deposits on behalf of PFI were not supported by the financial profiles of the account holders and the activities of PFI were not being carried out as per their declared objectives. It noted that the Income Tax Department had cancelled the registration granted to PFI and Rehab India Foundation.

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News Network
September 30,2022

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New Delhi, Sept 30: Congress leaders Shashi Tharoor and Mallikarjun Kharge have filed their nominations for the Congress presidential poll. 

Kharge's candidature was proposed by party leaders Ashok Gehlot, Digvijaya Singh, Pramod Tiwari, PL Punia, AK Antony, Pawan Kumar Bansal and Mukul Wasnik. 

G23 leaders Anand Sharma and Manish Tewari are also proposers for Kharge's candidature. Earlier in the day, Congress leader Digvijaya Singh announced that he would not contest the party president's election and would instead propose the candidature of his senior Kharge. 

Congress leader Sachin Pilot on Thursday night met Sonia Gandhi and discussed the crisis in the party's Rajasthan unit, and later said the Congress chief would take "positive decisions" with regard to the state. 

Pilot, who spent around an hour at Gandhi's residence where Congress general secretary (organisation) K C Venugopal was also present, said he conveyed his sentiments and gave his feedback to the party president.

Pilot's meeting with Gandhi comes days after an open rebellion by Chief Minister Ashok Gehlot's loyalists over a possible leadership change in the state. "I met Congress president Sonia Gandhi. She listened to me calmly. The events in Rajasthan were discussed in detail," Pilot said after the meeting.

Pilot met Gandhi hours after his bete noire Ashok Gehlot met her in the afternoon, following which the Rajasthan chief minister announced that he will opt out of the Congress president's race. Gehlot also said the decision on whether he would remain CM would be taken by party chief Sonia Gandhi.

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