Rupee, stocks rally as new RBI chief Rajan fuels confidence

September 5, 2013

RBI_chief_copy
Mumbai, Sep 5: The rupee rallied and shares surged on Thursday after the Reserve Bank of India (RBI) chief unveiled a slew of measures to support the ailing currency and open markets, providing a shot of confidence for investors unnerved by the country's worst economic crisis in two decades.

The rupee rose as much as 2.3 per cent to 65.53 per dollar, well off the record low 68.85 hit on August 28.

The Nifty rose as much as 3.3 per cent, propelled by lenders such as HDFC Bank, which surged after the new measures included increasing overseas borrowing limits for banks.

However, amid the euphoria over RBI governor Raghuram Rajan's strong Wednesday debut, economists warned he cannot by himself solve the challenges in an economy facing a sharp growth slowdown and a record high current account deficit, which have fueled a 16 per cent slide in the rupee so far this year.

The government has failed to push through politically tough reforms needed to fix the economy, and elections due by next May instead raise the prospect of expensive populist spending that could threaten the country's sovereign credit rating, which is one notch above junk status.

"To a certain extent, the recent rupee tumble and instability in the financial markets, has been a crisis of confidence. To that end, the path of action provided by the new governor and the stress on keeping communications predictable and consistent will be a welcome move," Radhika Rao, an economist at DBS in Singapore, said in an email to clients.

"Still, the external drivers of the rupee weakness will continue to dictate the momentum, along with the urgent need to address domestic structural pitfalls - fiscal and current account deficits, along with reviving investment activity."

At least for Thursday, Indian markets reflected the optimism placed on Rajan, a former chief economist at the International Monetary Fund who unexpectedly unveiled a flurry of proposals in his first day at the helm of the central bank.

In terms of action to prop up the rupee, the measures included providing exporters and importers more flexibility in hedging their forward currency contracts, as trading firms had long complained about regulations that left them unable to quickly cope with rapid currency movements.

"The statement is impressive and a must-read, in our view," Deutsche Bank said in a note.

"India's myriad cyclical and structural impediments will continue to hold back the economy for the time being, and risks of a deeper crisis are non-trivial, but (Wednesday's) statement shows a fresh and cohesive vision of monetary and financial sector policy from a newly appointed central bank governor can shine a much-needed light on India's promise and potential."

India's defence of the rupee has so far relied on controversial steps taken by the RBI, which have included draining cash from the market, raising short-term interest rates and imposing capital controls on resident Indians.

Investors have expressed little faith that the government can push through substantial reforms, such as a hike in subsidised fuel prices, that could help revive confidence in the economy.

Asia's third-largest economy is suffering from a dearth of investment and sharp slowdowns in the manufacturing and services sectors.

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Rupee, stocks rally as new RBI chief Rajan fuels confidence

Mumbai, Sep 5: The rupee rallied and shares surged on Thursday after the Reserve Bank of India (RBI) chief unveiled a slew of measures to support the ailing currency and open markets, providing a shot of confidence for investors unnerved by the country's worst economic crisis in two decades.

The rupee rose as much as 2.3 per cent to 65.53 per dollar, well off the record low 68.85 hit on August 28.

The Nifty rose as much as 3.3 per cent, propelled by lenders such as HDFC Bank, which surged after the new measures included increasing overseas borrowing limits for banks.
However, amid the euphoria over RBI governor Raghuram Rajan's strong Wednesday debut, economists warned he cannot by himself solve the challenges in an economy facing a sharp growth slowdown and a record high current account deficit, which have fueled a 16 per cent slide in the rupee so far this year.

The government has failed to push through politically tough reforms needed to fix the economy, and elections due by next May instead raise the prospect of expensive populist spending that could threaten the country's sovereign credit rating, which is one notch above junk status.

"To a certain extent, the recent rupee tumble and instability in the financial markets, has been a crisis of confidence. To that end, the path of action provided by the new governor and the stress on keeping communications predictable and consistent will be a welcome move," Radhika Rao, an economist at DBS in Singapore, said in an email to clients.

"Still, the external drivers of the rupee weakness will continue to dictate the momentum, along with the urgent need to address domestic structural pitfalls - fiscal and current account deficits, along with reviving investment activity."

At least for Thursday, Indian markets reflected the optimism placed on Rajan, a former chief economist at the International Monetary Fund who unexpectedly unveiled a flurry of proposals in his first day at the helm of the central bank.

In terms of action to prop up the rupee, the measures included providing exporters and importers more flexibility in hedging their forward currency contracts, as trading firms had long complained about regulations that left them unable to quickly cope with rapid currency movements.

"The statement is impressive and a must-read, in our view," Deutsche Bank said in a note.

"India's myriad cyclical and structural impediments will continue to hold back the economy for the time being, and risks of a deeper crisis are non-trivial, but (Wednesday's) statement shows a fresh and cohesive vision of monetary and financial sector policy from a newly appointed central bank governor can shine a much-needed light on India's promise and potential."

India's defence of the rupee has so far relied on controversial steps taken by the RBI, which have included draining cash from the market, raising short-term interest rates and imposing capital controls on resident Indians.
Investors have expressed little faith that the government can push through substantial reforms, such as a hike in subsidised fuel prices, that could help revive confidence in the economy.

Asia's third-largest economy is suffering from a dearth of investment and sharp slowdowns in the manufacturing and services sectors.

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News Network
December 5,2025

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New Delhi, Dec 5: IndiGo CEO Pieter Elbers issued a public apology this evening after more than a thousand flights were cancelled today, making it the "most severely impacted day" in terms of cancellations. The biggest airline of the country cancelled "more than half" of its daily number of flights on Friday, said Elbers. He also said that even though the crisis will persist on Saturday, the airline anticipates fewer than 1,000 flight cancellations.

"Full normalisation is expected between December 10 and 15, though IndiGo cautions that recovery will take time due to the scale of operations," the IndiGo CEO said. 

IndiGo operates around 2,300 domestic and international flights daily.

Pieter Elbers, while apologising for the major inconvenience due to delays and cancellations, said the situation is a result of various causes.

The crisis at IndiGo stems from new regulations that boost pilots' weekly rest requirements by 12 hours to 48 and allow only two night-time landings per week, down from six. IndiGo has attributed the mass cancellations to "misjudgment and planning gaps".

Elbers also listed three lines of action that the airline will adopt to address the issue.

"Firstly, customer communication and addressing your needs, for this, messages have been sent on social media. And just now, a more detailed communication with information, refunds, cancellations and other customer support measures was sent," he said.

The airline has also stepped up its call centre capacity.

"Secondly, due to yesterday's situation, we had customers stranded mostly at the nation's largest airports. Our focus was for all of them to be able to travel today itself, which will be achieved. For this, we also ask customers whose flights are cancelled not to come to the airports as notifications are sent," the CEO said.

"Thirdly, cancellations were made for today to align our crew and planes to be where they need to start tomorrow morning afresh. Earlier measures of the last few days, regrettable, have proven not to be enough, but we have decided today to reboot all our systems and schedules, resulting in the highest numbers of cancellations so far, but imperative for progressive improvements starting from tomorrow," he added.

As airports witnessed chaotic scenes, the Directorate General of Civil Aviation (DGCA) stepped in to grant IndiGo a temporary exemption from stricter night duty rules for pilots. It also allowed substitution of leaves with a weekly rest period. 

Civil Aviation Minister Ram Mohan Naidu has said a high-level inquiry will be ordered and accountability will be fixed.

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News Network
December 3,2025

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IndiGo, India’s largest airline, is battling one of its worst operational disruptions in recent years, with hundreds of delays and cancellations throwing domestic travel into chaos.

Government data on Tuesday showed its on-time performance plunging to 35%, an unusual dip for a carrier long associated with punctuality.

By Wednesday afternoon, airports in Delhi, Mumbai, Bengaluru and Hyderabad had collectively reported close to 200 cancellations, stranding travellers across the country.

Crew Shortage After New Duty Norms

A major trigger behind the meltdown is a severe crew shortage, especially among pilots, following the rollout of revised Flight Duty Time Limitation (FDTL) norms last month.

The rules mandate longer rest hours and more humane rosters — a shift IndiGo has struggled to incorporate across its vast network.

Sources said several flights were grounded due to lack of cabin crew, while some delays stretched upwards of eight hours.

With IndiGo controlling over 60% of India’s domestic aviation market, the ripple effect has impacted airports nationwide.

IndiGo Issues Apology, Lists “Compounding Factors”

In a statement, IndiGo acknowledged the large-scale disruption:

“We sincerely apologise to customers. A series of unforeseen operational challenges — technology glitches, winter schedule changes, adverse weather, system congestion and updated FDTL norms — created a compounding impact that could not have been anticipated.”

To stabilise operations, the airline has begun calibrated schedule adjustments for the next 48 hours, aiming to restore punctuality. Affected passengers are being offered refunds or alternate travel arrangements, IndiGo said.

What the FDTL Rules Require

The FDTL norms, designed to reduce pilot fatigue, cap duty and flying hours as follows:
•    Maximum 8 hours of flying per day
•    35 hours per week
•    125 hours per month
•    1,000 hours per year

Crew must also receive rest equalling twice the flight duration, with a minimum 10-hour rest period in any 24-hour window.

The DGCA introduced these limits to enhance flight safety.

Hyderabad: 33 Flights Cancelled, Long Queues Reported

Hyderabad’s Rajiv Gandhi International Airport saw heavy early-morning crowds as 33 IndiGo flights (arrivals and departures) were cancelled.

The airport clarified on X that operations were normal, advising passengers to contact IndiGo directly for latest flight status.

Cancellations included flights to and from Visakhapatnam, Goa, Ahmedabad, Delhi, Bengaluru, Chennai, Madurai, Hubli, Bhopal and Bhubaneswar.

Bengaluru: 42 Flights Disrupted

Bengaluru’s Kempegowda International Airport recorded 42 cancellations — 22 arrivals and 20 departures — affecting routes to Delhi, Mumbai, Chennai, Hyderabad, Goa, Kolkata and Lucknow.

Passengers Vent on Social Media

Irate travellers took to X to share their experiences. One passenger stranded in Hyderabad wrote: “I have been here since 3 a.m. and missed an important meeting.”

Another said: “My flight was pushed from 1:55 PM to 2:55 PM and now 4:35 PM. I was informed only three minutes before entering the airport.”

Delhi Airport Hit by Tech Glitch

At Delhi Airport, the disruption deepened due to a slowdown in the Amadeus system — used for reservations, check-ins and departure control.

The technical issue led to longer queues and sluggish processing, adding to delays already worsened by staff shortages.

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News Network
December 6,2025

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With IndiGo flight disruptions impacting thousands of passengers, the airline on Saturday said that it will offer full waiver on all cancellations/reschedule requests for travel bookings between December 5, 2025 and December 15, 2025.

Earlier in the day, the civil aviation ministry had directed the airline to complete the ticket refund process for the cancelled flights by Sunday evening, as well as ensure baggage separated from the travellers are delivered in the next two days.

In a post on X, titled 'No questions asked', IndiGo wrote, "In response to recent events, all refunds for your cancellations will be processed automatically to your original mode of payment."

"We are deeply sorry for the hardships caused," it further added.

Several passengers, however, complained of not getting full refund as promised by the airline.

Netizens have shared screenchots of getting charged for airline cancellation fee and convenience fee.

"Please tell me why u have did this airline cancellation charges when u say full amount will be refunded (sic)," a user wrote sharing a screenshot of the refund page.

"Well, but you have still debited the convenience charges," wrote another.

Passengers have also raised concerns about the "cancel" option being disabled on the IndiGo app. "First enable the 'Cancel' button on your App & offer full refund on tickets cancelled by customers between the said dates," wrote a user.

A day after the country's largest airline, IndiGo, cancelled more than 1,000 flights and caused disruptions for the fifth day on Saturday, the ministry said that any delay or non-compliance in refund processing will invite immediate regulatory action.

The refund process for all cancelled or disrupted flights must be completed by 8 pm on Sunday, the ministry said in a statement.

"Airlines have also been instructed not to levy any rescheduling charges for passengers whose travel plans were affected by cancellations," it said.

On Saturday, more than 400 flights were cancelled at various airports.

IndiGo has also been instructed to set up dedicated passenger support and refund facilitation cells.

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