The rupee is trading at 61.94/95 versus its close of 62.04/05 on 20 December, tracking slight gains in most Asian sharemarkets.Traders will monitor the domestic sharemarket for cues on the direction of foreign fund flows.Asian currencies trading mixed versus the dollar.The BSE Sensex is up more than 100 points, while the MSCI index of Asian shares ex-Japan rises 0.45 per cent.Traders expect the USD/INR pair to hold in a 61.80 to 62.20 range initially during the session.(Reuters)
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The rupee rose on Friday, mirroring strong stock market gains, ending a week in which it rose 0.1 percent, despite the Federal Reserve beginning its much awaited stimulus tapering.The currency's relatively stable performance even as the U.S. announced tapering showed India's better preparedness to deal with any fallout of such foreign fund outflows.For one, the Reserve Bank of India's two special concessional swap facilities have added $34 billion to forex reserves. At the same time, the government has said it would contain the current account deficit below $60 billion in the current financial year.In fact, the rupee was supported on Friday by expectations of more foreign fund inflows as local stocks jumped 1.8 percent, their most in nearly a month. Fund flows have been strong in December, both into equities and debt, totalling over $3 billion through Thursday."The rupee has gained after opening lower on account of capital flows and Sensex rising as the effect of tapering fade out and risk on sentiment dominates the market," said Anil Kumar Bhansali, vice president at Mecklai Financial.The partially convertible rupee closed at 62.04/05 per dollar compared with Thursday's close of 62.14/15, snapping three days of losses.In the offshore non-deliverable forwards, the one-month contract was at 62.55, while the three-month was at 63.37.(Reuters)
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When it comes to buying a car, consumers usually enquire about mileage, road safety and maintenance cost etc. Nowadays, more and more cars come with new features and hi-tech gadgets for the customers. But the best of cars, can't make driving in congested roads easy. A group of researchers from Australia were recently in India to hold talks with IT firms like Tech Mahindra, TCS, Infosys, HCL and Cognizant for developing a system to address traffic problems.Professor Jugdutt Singh, Director of the Centre for Technology Infusion at the La Trobe University, Australia, who was a member of the research delegation, during a recent visit to New Delhi informed the media that the researchers at the university have already built a patented system for automobiles using sensor technology to enable vehicle-to-vehicle communication.The pilot phase of implementing the technology has already started in Victoria, Australia. By using this technology, cars can signal to each other to align in such a way that congestion is avoided.Some firms have already shown interest in collaborating for developing advanced transportation software, which help ease off the traffic especially in regions where huge numbers of vehicles ply on less road space, leading to congestions.While planning to implement the technology in India, the first thing that came to his mind was the traffic in Delhi and Mumbai, said Professor Singh.A sensor with Dedicated Short Range Communication (DSRC) technology embedded in the vehicles convey information about the traffic scenario while on-the-drive display and voice messages help the driver avoid heading towards traffic jams. Also, this information can be shared amongst vehicles within a radius of 500 meters to 1 km. This technology will also keep a check on errant drivers as a warning will be sent to the rashly driven vehicle by the other car near it using the same technology. However, this will only be possible if all cars come embedded with the sensor.The privacy settings have been designed in a way that information regarding only traffic congestion, accidents on the road, rash driving and related matters could be exchanged and couldn’t be misused.Ccording to the researchers, this could be the next big thing after the mileage and maintaining cost in encouraging prospective buyers.Singh mentioned that the cars with this new technology will start rolling out by 2015.In the long run, the researchers can look at further upgrading the solution by connecting with the emergency help-lines such as fire brigade, police control room, ambulance services, women help-lines etc which will come as a handy help to anyone and everyone driving on the road. Technology is a tool which has a large scope for improvement with each passing day and with the kind of resources available these days it’s even easier to implement it.
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Elections in all the "fragile five" emerging economies next year, along with the thorny topics of Syria and Iran, will make life tricky for investors trying to steer through political risks in developing markets after a hairy 2013.The withdrawal of US monetary stimulus will set the backdrop for the year, particularly for these big developing economies that depend heavily on foreign investor inflows.Investors in companies or banks or other institutions agreeing contracts in emerging markets can buy insurance policies covering them against specific risks such as political violence, expropriation or contract renegotiations by governments or local private companies. Institutional investors may also use credit default swaps to hedge against the possibility of a government not paying its debts.The size of the political risk insurance market jumped 33 per cent to record highs of $100 billion last year, according to data released earlier this month by the World Bank's political risk arm, which said it expected similar growth this year.Investors fretted about the Middle East and North Africa, expropriation risk in Latin America and general capital constraints, the report from the World Bank's Multilateral Investment Guarantee Agency (MIGA) said.The Fed's decision this week to reduce the money-printing that has fuelled demand for risky assets is expected to drag on growth in emerging markets next year, with Brazil, India, Indonesia, South Africa and Turkey seen as especially vulnerable to a sudden withdrawal of foreign cash.But with elections due in all of the "fragile five" next year, politicians are likely to spend money to try to keep voters sweet rather than taking a more cautious approach."These are all the countries where markets have wanted to see small twin deficits - elections make that hard to achieve, at least on the budget side," said Charles Robertson, chief economist at Renaissance Capital. "There is lots of potential for markets to be jittery over these countries in 2014."Emerging markets have already suffered from expectations of a tapering of the Fed's bond-buying programme, which has been on the cards for more than six months. Stocks are in the red for the year, heavily underperforming developed markets.But with the reduction in US stimulus likely to be a theme for the whole of 2014, politicians will be wary of voter reaction over jobs or services.The greater wealth that recent rapid growth has brought has pushed popular demands beyond basic human needs, political risk analysts say, a thread that runs from the Arab Spring uprisings of 2011 through to this month's protests in Kiev."The frustration that spilled onto the streets was driven by middle-class people beginning to assert themselves politically," said Christopher Torrens, director of global risk analysis at Control Risks, which sees next year as "particularly challenging".Turkey turned from being an investment darling to an investment pariah in the space of a few weeks this year after the rough treatment of protests over a park in Istanbul, while a corruption probe this week has increased tensions.Brazilian commuters protested about bus fares, and Ukrainians sought closer links to the European Union.South Africa and India hold parliamentary elections in 2014, while Brazil and Turkey have presidential elections. Indonesia has both.South Africa, NigeriaIn Syria, the nearly three-year revolt against President Bashar al-Assad suggests to investors that the Arab Spring is not yet over, particularly as Tunisia and Egypt remain unstable.Political risk brokers say there has been an increase in interest in protection for this region."The (Syrian) conflict ... is spilling over into neighbouring countries, worsening an already-frail security situation," MIGA said in its report.Across Africa, a rash of elections in the past year went off smoothly, notably those in Kenya, where the previous vote was marred by post-election violence in 2008.But elections next year in South Africa - and in Nigeria in 2015 - are worrying investors."Expectations are for policy deterioration in South Africa over the first half and for Nigeria in the second half," Philippe Pontet, director for Africa at political risk firm Eurasia, told a recent conference call.Risk can also come from the handover of power if a long-standing president such as Zimbabwe's Robert Mugabe dies."There are countries where, if the one strong man moves on, you end up with a vacuum, that's where you have uncertainty," said Peter Jenkins, co-head of political and credit risk at insurance group Brit.Iran and the West last month made an interim agreement to end the stand-off over Iran's nuclear programme, designed to allow the lifting of sanctions imposed on the Islamic Republic.But for Francois Savary, chief investment officer of Swiss private bank Reyl, that only adds to the risks.Top officials in Sunni Muslim-ruled Saudi Arabia are furious that senior US officials held secret bilateral talks with Shi'ite Iran before the agreement."We do not like what's happening in the Middle East, the reaction of Saudi Arabia to US foreign policy," Savary said."This region remains under the radar."Savary is enthusiastic about emerging markets as a whole for next year, but is avoiding investment in the Middle East, including market star Dubai, because of the potential risks.But the uncertainty can offer opportunities.Opposition parties in India and Brazil, for example, are seen as more business-friendly."(Fragile five) could be the most profitable markets to be in, because of the potential volatility," said Robertson.And Julian Mayo, co-chief investment officer at emerging market fund manager Charlemagne Capital, welcomed recent steps to quicken the pace of market reform in China."In China, political risk has clearly fallen. In Brazil and India, things are better than six months ago - political risk is if anything going down."(Reuters)
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Ending months of uncertainty, the Cabinet on Wednesday night (19 December) decided to allow Reliance Industries to double the price of natural gas from April provided the firm furnishes a bank guarantee to cover its liability if gas hoarding charges against it are proved.The bank guarantee, which will be equivalent to the incremental revenue that RIL will get from the new gas price, will be encashed if it is proved the company hoarded gas or deliberately suppressed production at the main Dhirubhai-1 and 3 (D1&D3) fields in the eastern offshore KG-D6 block since 2010-11.The Cabinet Committee on Economic Affairs (CCEA) decided that the "contractor (RIL) will be allowed to sell natural gas from D1&D3 at revised price from April 1, 2014. The sale will be permitted on the basis of a bank guarantee to be furnished by RIL in favour of the Government for the incremental gas rate," Oil Minister M Veerappa Moily told reporters here.The CCEA headed by Prime Minister Manmohan Singh decided there will be no change in the Rangarajan formula of pricing domestically produced gas - both conventional and non-conventional fuels such as coal-bed methane and shale gas - at an average of international gas hub rates and the cost of liquefied natural gas (LNG) imported into India."There will be no cap or floor for the price," Oil Secretary Vivek Rae said.According to the formula, the gas price on April 1, 2014, for all producers including state-owned Oil & Natural Gas Corp (ONGC) and private firms such as RIL will be about USD 8.4 per million British thermal units against USD 4.2 currently.Gas is a crucial input for the power and fertiliser sectors and every dollar increase will raise the cost of production.Rae said the format of the bank guarantee will be vetted by the Law Ministry and a supplementary agreement will be signed with RIL by next month for furnishing and execution of the guarantees. Prodded by the Finance Ministry, the Oil Ministry had initially proposed to deny the new gas price until RIL either made up for the shortfall in output during past three financial years or it was proved that the company was not responsible for failing to meet production targets.The issue had held up notification of the new gas pricing formula.As a way out, it was proposed that RIL and its partners BP plc of UK and Canada's Niko Resources be asked to give bank guarantees for the incremental revenue they would get until the issue is resolved through arbitration and validation by independent international experts.The government approved the Rangarajan formula in June.The Finance Ministry wanted to change the approved formula by excluding the price of spot LNG purchases, which it said was highly volatile. This would have reduced the gas price to USD 8.1.Moily said the CCEA today decided that "no change needs to be made in the early decision of CCEA on including spot prices in computation of gas price. Also, no cap or floor on gas price is required to be stipulated."In the run-up to the Cabinet decision, the Finance Ministry had sought to know if the government's position on the reasons for the fall in gas output at KG-D6 would be diluted by accepting the bank guarantees.Also, it felt the bank guarantees would run into USD 9 billion during the duration of the arbitration, but Rae said the oil ministry believes the bank guarantee, which is to be given on a quarterly basis, would not accumulate to such an amount.(Agencies)
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The arrest in New York of Indian diplomat Devyani Khobragade has provoked anger and outrage, especially because she underwent a strip search that some in her home country have called degrading and unnecessary.But such searches are a common feature of the US criminal justice system, even for defendants from the elite echelons of society.Strip searches for new inmates are routine in jails across the United States. And defendants are strip-searched every time they leave federal detention facilities, such as for court hearings, and when they return.In the case of Khobragade, who was arrested last week over how much she paid her housekeeper, she was strip-searched under what US officials said was standard practice for defendants arrested by federal authorities in New York.While civil liberties advocates have criticized the practice as needlessly invasive and unnecessary in the majority of cases, US courts have largely upheld the searches.Last year, the US Supreme Court ruled 5-4 that jail strip searches for new inmates were constitutional, even when there is no suspicion that an individual is hiding contraband. The decision applied to anyone arrested accused of a crime, including relatively minor infractions such as traffic violations.In 2010, before the Supreme Court ruling, New York City agreed to pay $33 million to thousands of people who underwent strip searches in city jails to settle a class action lawsuit. But a lawyer for the plaintiffs in that case, Richard Emery, said on Thursday that a similar case would likely fail today in light of the Supreme Court ruling."It's one of the travesties of current developments in the Supreme Court of the United States that people can be dehumanized in this way for no reason," Emery said.The US Marshals Service, which handles transport for federal prisoners, has confirmed that Khobragade was strip-searched at a holding cell inside a New York federal courthouse.'Standard Practice'In New York, where security is tighter than in other parts of the country, US Marshals follow that procedure for anyone who is arrested and held in a courthouse cell with other detainees, a spokeswoman for the agency said.In a rare public statement on a pending case involving his office, the chief prosecutor for Manhattan, US Attorney Preet Bharara, said on Wednesday that the search of Khobragade was "standard practice for every defendant, rich or poor, American or not."Lawyers at the Federal Defenders of New York, which provides legal representation to large numbers of defendants in the federal court where Khobragade appeared last week, said many clients have complained about the strip searches, which they said appear to take place automatically.But there are exceptions.In special cases, such as the arrest of juveniles, the arresting agency can ask that the detainee be kept separate from other prisoners, which would not require a strip search, US Marshals spokeswoman Nikki Credic-Barrett said.In the case of Khobragade, Credic-Barrett said the Marshals Service received no such instruction from the State Department's Diplomatic Security Service, which carried out the arrest.Unlike in the federal system, individuals arrested by the New York City Police Department are generally not subjected to strip searches in courthouse holding cells, said Tom Repetto, a police historian and author of several books on policing.However, prisoners are strip-searched upon arrival at the city's Rikers Island jail, as the former International Monetary Fund chief Dominique Strauss-Kahn was in 2011 after being charged with attempted rape.That case prompted its own international outcry over another facet of US criminal justice, the "perp walk," after a disheveled Strauss-Kahn was marched in handcuffs past television cameras. The images shocked observers in France, where such pictures are prohibited from publication before a conviction.Strip searches are not a routine part of felony arrests in India, and Indians were "understandably outraged," said Meenakshi Ganguly, the South Asia Director of Human Rights Watch. But the uproar over Khobragade's treatment has overshadowed questions about the rights of her employee, also an Indian national, Ganguly said.A senior Indian government source has said Khobragade also was subjected to a cavity search. Credic-Barrett denied a cavity search took place.Under Marshals Service regulations, a strip search includes visual inspection of the mouth, genitals and anus. A "digital cavity search," by contrast, can only be performed by medical personnel and in some cases may require a search warrant, according to the regulations, Credic-Barrett said. (Reuters)
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The rupee falls for a fourth session, driven by weak Asian FX a day after US announces stimulus taper. The unit is trading at 62.27/29 versus Thursday's (19 December) close of 62.14/15.The rupee is, however, off 62.40 low on dollar selling by a large state-run as well as a foreign bank.The Thai baht touched a three-year low on 20 December, as the dollar stayed firm in the wake of the US Federal Reserve's decision to start scaling back its bond-buying stimulus from January.The USD/INR pair may hold in 62.20-62.70 range for session, say dealers.(Reuters)
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Gold futures fell more than 1 percent on Thursday to their lowest level in more than two months, tailing overseas leads though a weaker rupee kept the downside limited, while premiums eased in the domestic market.At 5.22 pm , the most-active gold contract for February delivery was 1.36 per cent lower at Rs 28,474 per 10 gram on the Multi Commodity Exchange. It had hit a low of Rs 28,390 earlier in the day, a level last seen on October 15.Silver also dropped to its lowest level in nearly two weeks.Silver for March delivery was 2.95 per cent higher at Rs 45,009 per kg, after hitting a low of Rs 43,629, a level last seen on December 6, 2013.In the overseas market, gold slid more than 1 per cent to its lowest since late June after the US Federal Reserve took its first step away from the ultra-loose monetary policy that had helped drive bullion prices to record highs in recent years.The rupee, which weakened on Thursday, plays an important role in determining the landed cost of the dollar-quoted yellow metal.In the domestic market, premiums eased to $110 an ounce from up to $160 an ounce quoted earlier this month."Small jewellers are hit the most due to policy changes," said Harshad Ajmera, the proprietor of JJ Gold House, a wholesaler in Kolkata, adding premiums had eased to $110 an ounce due to availability of smuggled yellow metal.Indian gold imports may fall 70 percent in the final quarter of 2013 from 255 tonnes in the year-ago period and are expected to be half the usual levels at 500-550 tonnes next year if new import rules are maintained, a top trade body official said.To curb a rising trade gap, the Indian government slapped a record import duty of 10 per cent, and tied imports for domestic consumption with exports.India will keep a tight leash on gold imports despite a recent improvement in its trade deficit and lobbying by a bullion industry struggling with high premiums and a supply crunch.(Reuters)
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India said on Thursday (19 December) the case against its diplomat Devyani Khobragade, arrested in New York on charges of visa fraud, should not be pursued and withdrawn by the US authorities.External Affairs Minister Salman Khurshid said he had received a call from US Secretary of State John Kerry last night but he was not available at that time."I was not available when John Kerry called. We are trying to log a time for a call this evening. Kerry is in the Philippines and there is a huge time difference," he said."I have sought details of what happened in the case of the diplomat," he said, asserting that the matter should not be pursued and be withdrawn."Our relationship has a lot of investment, it is not an irreversible matter and we have to deal with it sensibly," the Minister said.A 1999-batch IFS officer, Khobragade was arrested on December 12 on visa fraud charges as she was dropping her daughter to school and released on a $250,000 bond only after pleading not guilty in court.The ill-treatment of its diplomat evoked a sharp reaction from India which initiated a slew of steps to downgrade the privileges enjoyed by the US diplomats and their families including withdrawing airport passes and stopping import clearances. Prime Minister Manmohan Singh had yesterday described as "deplorable" the way the diplomat was treated in the US.She has now been transferred to the Indian Mission to the UN to give her fuller diplomatic immunity.In his first statement in Parliament on the issue, Khurshid had yesterday said that she was the victim of a "conspiracy" and that some people had "trapped" Khobragade, who was put through both strip and cavity searches, procedures normally used for criminals.He had also said that India will intervene "effectively and specifically" to ensure the return and restoration of dignity of its Deputy Consul General as it a matter of the country's prestige and honour.There is a strong demand that Khobragade should be released unconditionally and all the charges against her should be dropped.(Agencies)
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The rupee is off lows, which dealers attribute to dollar selling from state-run, foreign banks. The rupee is at 62.27/28, down from an intraday low of 62.48. The unit had closed at 62.09/10 on 18 December.Dealers say the impact of $10 billion a month taper by the Federal Reserve largely priced in.Some say selling by state-run banks may be related to the Reserve Bank of India. However, others say it could be bunched-up inflows due to strike on Wednesday when most state-run banks were thinly staffed."There has been some gains in crosses such as euro and also the fixing is over," says a dealer, justifying the rupee recovery.(Reuters)
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