Double Blow to Rupee Quells Revival Hope for Worst Asia Currency

Agencies
December 12, 2018

Dec 12:  Rupee bulls should put to rest any hope of a respite for Asia’s worst currency in the last few days of what’s been a dreadful year.

This week’s shock departure of India’s central bank chief and defeat for Prime Minister Narendra Modi’s ruling party in key state elections have dealt a double blow to the currency, taking its year-to-date loss to 11 percent. Mizuho Bank Ltd. is expecting more pain.

The rupee may drop to about 73 per dollar as Urjit Patel’s resignation leads foreign investors to fret over the Reserve Bank of India’s independence and policy continuity, according to Masakatsu Fukaya, an emerging-market currency trader at the lender in Tokyo. A break of that level may open the door for a slide to 74, he said.

While the government has rushed to appoint Shaktikanta Das -- a former bureaucrat -- as the new RBI governor, investors would want to see if that resolves differences seen between the central bank and the administration in the run up to Patel’s exit.

They will also have to contend with political uncertainty after Modi’s Bharatiya Janata Party faced defeat in three key states, helping his main opponents seize back momentum ahead of India’s 2019 national vote. The loss amounts to Modi’s biggest political setback since taking office in 2014.

“A potential implication from BJP not having a strong hold in state elections would be the risk of more populist policies” which may add to India’s fiscal slippage, said Frances Cheung, head of Asia macro strategy at Westpac Banking Corp. in Singapore. That -- along with any potential change in the RBI’s monetary-policy stance due to the appointment of a new governor -- “does not bode well for the rupee,” she said.

‘Tough Going’

Bank of America Merrill Lynch is also predicting short-term weakness for the rupee, which slid 1.5 percent over the last two days to close at 71.8575 per dollar on Tuesday.

The currency will depreciate also because “oil prices have bottomed for the time being,” Adarsh Sinha, co-head of Asia rates and currency strategy at BofAML, said on Bloomberg Television. “Over the next three to four months, it’s going to be tough going for the Indian rupee heading into the general election where there is some uncertainty around the BJP has to form a coalition or not.”

Sinha said the central bank could cut rates as soon as February, partly because inflation has undershot its target “quite considerably.” There’s a “justifiable case for the RBI to ease monetary policy irrespective of who the governor was,” he said.

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May 11,2024

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Karnataka: BJP leader and advocate G Devaraje Gowda was arrested in connection with a sex abuse video allegedly belonging to Hassan JD(S) MP Prajwal Revanna.

According to police, Devaraje Gowda was arrested at Gulihal tollgate by the Hiriyur police in this district on Friday night for leaking the video in a pen drive.

He was arrested on a tip-off received by the Hassan police, which wanted his presence for the case.

Several explicit videos involving Prajwal started making the rounds ahead of the first phase of Lok Sabha elections in Karnataka, which took place on April 26.

The MP, a grandson of former prime minister H D Deve Gowda, is absconding and a 'blue corner' notice has been issued against him by Interpol.

Three FIRs, including charges of rape, molestation, intimidation, blackmailing and threatening, have been registered against Prajwal.

Devaraje Gowda is accused of leaking these videos, which he has categorically rejected.

He contested in the 2023 Assembly elections against JD(S) MLA from Holenarasipura H D Revanna.

H D Revanna, father of Prajwal, is at present in jail on charges of kidnapping a woman, a mother of three.

Ahead of polls, Devaraje Gowda had warned BJP’s central leadership against backing Prajwal Revanna and brought his sex scandal to light.

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May 5,2024

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London: London's Labour mayor Sadiq Khan on Saturday secured a record third term, as the party swept a host of mayoral races and local elections to trounce the ruling Conservatives just months before an expected general election.

Khan, 53, beat Tory challenger Susan Hall by 11 points to scupper largely forlorn Tory hopes that they could prise the UK capital away from Labour for the first time since 2016.

The first Muslim mayor of a Western capital when initially elected then, he had been widely expected to win as the opposition party surges nationally and the Tories struggle to revive their fortunes.

Hours later in the West Midlands, Conservative mayor Andy Street -- bidding for his own third term -- unexpectedly lost to Labour's Richard Parker, dealing a hammer blow to Prime Minister Rishi Sunak.

That narrow loss left the beleaguered leader with only one notable success in Thursday's votes across England, after Tory mayor Ben Houchen won in Tees Valley, northeast England -- albeit with a vastly reduced majority.

In a dismal set of results, Sunak's party finished a humiliating third in local council tallies after losing nearly 500 seats.

"People across the country have had enough of Conservative chaos and decline and voted for change with Labour," its leader Keir Starmer said shortly after confirmation of Parker's victory.

He called the result "phenomenal" and "beyond our expectations".

Writing earlier in Saturday's Daily Telegraph, Sunak had conceded "voters are frustrated" but tried to argue Labour was "not winning in places they admit they need for a majority".

"We Conservatives have everything to fight for," Sunak insisted.

'Spirit and values'

Labour, out of power since 2010 and trounced by Boris Johnson's Conservatives at the last general election in 2019, also emphatically snatched a parliamentary seat from the Tories.

Starmer has seized on winning the Blackpool South constituency and other successes to demand a general election.

Sunak must order a national vote be held by January 28 next year at the latest, and has said he is planning on a poll in the second half of 2024.

Labour has enjoyed double-digit poll leads for all of his 18 months in charge, as previous Tory scandals, a cost-of-living crisis and various other issues dent his party's standing.
On Thursday, it was defending nearly 1,000 council seats, many secured in 2021 when it led nationwide polls before the implosion of Johnson's premiership and his successor Liz Truss's disastrous 49-day tenure.

In the end, they lost close to half and finished third behind the smaller centrist opposition Liberal Democrats.

Meanwhile Labour swept crunch mayoral races across England, from Yorkshire, Manchester and Liverpool in the north to contests across the Midlands.

In London, Khan netted 44 percent of the vote and saw his margin of victory increase compared to the last contest in 2021.

"It's truly an honour to be re-elected for a third term," he told supporters, accusing his Tory opponent of "fearmongering".

"We ran a campaign that was in keeping with the spirit and values of this great city, a city that regards our diversity not as a weakness, but as an almighty strength -- and one that rejects right hard-wing populism," he added.

'Change course'

If replicated in a nationwide contest, the council tallies suggested Labour would win 34 percent of the vote, with the Tories trailing by nine points, according to the BBC.

Sky News' projection for a general election using the results predicted Labour will be the largest party but short of an overall majority.

Speculation has been rife in Westminster that restive Tory lawmakers could use dire local election results to try to replace Sunak.

Despite the returns being at the worst end of estimates, that prospect has not so far materialised.

Ex-interior minister and Sunak critic Suella Braverman warned in the Sunday Telegraph that Sunak's plan "is not working and he needs to change course", urging a more muscular conservatism.

But she cautioned against trying to replace him, warning "changing leader now won't work: the time to do so came and went".

Meanwhile, polling expert John Curtice assessed there were some concerning signs for Labour, which lost control of one local authority and some councillors elsewhere reportedly over its stance on the Israel-Hamas war.

"These were more elections in which the impetus to defeat the Conservatives was greater than the level of enthusiasm for Labour," Curtice noted in the i newspaper.

"Electorally, it is still far from clear that Sir Keir Starmer is the heir to (Tony) Blair."

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May 12,2024

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Bengaluru: Karnataka Home Minister G Parameshwara on Sunday said that the Special Investigation Team (SIT), probing into sexual abuse charges against Hassan MP Prajwal Revanna, will not be going abroad to bring him back, and the Interpol will share information about him.

He also cautioned political leaders about making public statements or sharing information in connection with the case, which is sensitive.

The 33-year-old Prajwal Revanna, who is grandson of JD(S) patriarch and former Prime Minister H D Deve Gowda, is facing charges of sexually abusing several women.

The scandal has raised a political storm with the ruling Congress and BJP-JD(S) engaged in a slugfest.

Prajwal Revanna is said to have flown abroad on April 27, a day after the first phase of Lok Sabha polls in Karnataka was held.

He was BJP-JD(S) alliance's joint candidate from Hassan Lok Sabha segment, which went to polls in the first phase.

"No, there is no such option. Blue Corner Notice has been issued and the Interpol will share the information. The respective country in which he is found or identified - they will inform them (Interpol) and then our agencies, the CBI will get to know, and through them we will get to know."

"So far there is no information," Parameshwara said.

He was responding to a question on reports about the SIT team travelling abroad in connection with the case.

Speaking to reporters, he said, "Investigation is going on, not to affect the investigation we don't want to share any information."

Responding to a question on Union Minister Pralhad Joshi's statement alleging conspiracy behind the arrest of BJP leader Devaraje Gowda, for making allegations against Congress leaders in connection with the case, Parameshwara said, "If anyone says anything I cannot react to it. We cannot respond to every public statement. As this is a serious case, we cannot share information until the investigation is completed."

"My request to the public and to our leaders is to be cautious while making statements. If not, based on the statements given by them, we may have to call them for investigation and record their statement under 41 A of CrPC," he added.

Asked whether JD(S) leader H D Kumaraswamy will also be served notice, the Minister said he is a former CM and that he believes that the former has taken this case seriously.

"Before giving any statements on this case or before sharing any information in the public domain, one has to be cautious, and this applies to all," he added.

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