Latest News Today – Rupee Hits Three-Month Low, Traders Expect More Losses


Rupee fell to its lowest levels in three months on Monday

The rupee dropped to its lowest level in three months on Monday, in line with other Asian currencies, as the rapid spread of the Delta variant of coronavirus threatened to derail economic recovery.

The partially-convertible rupee ended at 74.87/88 per dollar, compared with its close of 74.56 on Friday. The currency fell 0.4 per cent on the day, its biggest single-day fall since June 17.

“The bias of risk appetite is gradually turning towards risk-off as markets evaluate the impact of a resurgence in Covid-19 cases worldwide against a backdrop of escalating inflation environment and emergence of US-China tensions,” said Upasna Bharadwaj, economist at Kotak Mahindra Bank.

Stock markets and currencies in Asia saw heavy losses as some countries in the region tightened curbs to tackle a highly contagious Delta variant-fuelled surge of infections that sparked a sell-off in risky assets. 

India reported 38,164 new infections in the last 24 hours, data from health ministry showed, with deaths rising by 499 — the lowest in more than three months. The country’s broader NSE share index and the main BSE share index both dropped 1.1 per cent each.

The dollar gained broadly as investors expressed renewed skepticism over the potential for a strong economic rebound from the pandemic.

Looking ahead, traders now broadly expect the rupee to trade in a range of 74.40-75.40 over the week.



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Latest News Today – Vaccination Push Has Brightened Near-Term Prospects Of


Aggressive vaccination push has brightened near term economic prospects, RBI has said

The near-term prospects for the Indian economy have brightened with the tapering of the second wave as well as aggressive vaccination push, is what the Reserve Bank of India (RBI) has observed in its monthly bulletin for July 2021, while commenting on the overall state of the economy.

At the same time though, it has noted that a substantial increase in aggregate demand has not happened, even though various high frequency indicators have shown a recovery.

On the other hand, the central bank’s bulletin said that agricultural conditions are favourable with monsoon’s revival, however the second wave has adversely impacted the revival of manufacturing and services sectors.

“A pick-up in inflation is driven largely by adverse supply shocks and sector-specific demand-supply mismatches caused by the pandemic,” the bulletin said.

These factors should ease over the year as supply side measures take effect, it noted.

Monetary policy transmission in the country is the second key area under focus in RBI’s bulletin, where it has said that transmission of policy repo rate changes to deposit and lending rates of scheduled commercial banks (SCBs) has improved substantially since the introduction of external benchmark linked lending rate (EBLR) regime in October 2019.

“Data collected from banks suggest that the share of outstanding loans linked to external benchmark in total floating rate loans has increased from as low as 2.4 per cent during September 2019 to 28.5 per cent by the end of 2020-21,” it said.

The third main focus of RBI bulletin is on the pharmaceutical exports, where it has observed that the Indian pharmaceutical industry is currently heavily dependent on its imports of active pharmaceutical ingredients (APIs), especially from China, despite having domestic research and development (R&D) potential through various channels such as joint ventures and domestic capacity improvements.

It has suggested that timely diversification of imports of raw materials and a long-term approach towards R&D is required for elevating the sector’s global position.



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Latest News Today – Amazon, Tata Say E-Commerce Rules Will Hit Businesses:


Tata Group, Amazon have warned that new e-commerce rules will impact their businesses

Amazon.com Inc and Tata Group warned government officials on Saturday that plans for tougher rules for online retailers would have a major impact on their business models, four sources familiar with the discussions told Reuters.

At a meeting organised by the Consumer Affairs Ministry and the Government’s investment promotion arm, Invest India, many executives expressed concerns and confusion over the proposed rules and asked that the July 6 deadline for submitting comments be extended, said the sources.

The Government’s tough new e-commerce rules announced on June 21 aimed at strengthening protection for consumers, caused concern among the country’s online retailers, notably market leaders Amazon and Walmart Inc’s Flipkart.

New rules limiting flash sales, barring misleading advertisements and mandating a complaints system, among other proposals, could force the likes of Amazon and Flipkart to review their business structures, and may increase costs for domestic rivals including Reliance Industries’ JioMart, BigBasket and Snapdeal.

Amazon argued that COVID-19 had already hit small businesses and the proposed rules will have a huge impact on its sellers, arguing that some clauses were already covered by existing law, two of the sources said.

The sources asked not to be named as the discussions were private.

The proposed policy states e-commerce firms must ensure none of their related enterprises are listed as sellers on their websites. That could impact Amazon in particular as it holds an indirect stake in at least two of its sellers, Cloudtail and Appario.

On that proposed clause, a representative of Tata Sons, the holding company of Tata Group, argued that it was problematic, citing an example to say it would stop Starbucks – which has a joint-venture with Tata in India – from offering its products on Tata’s marketplace website.

The Tata executive said the rules will have wide ramifications for the conglomerate, and could restrict sales of its private brands, according to two of the sources.

Tata declined to comment.

The sources said that a consumer ministry official argued that the rules were meant to protect consumers and were not as strict as those of other countries. The ministry did not respond to a request for comment.

A Reliance executive agreed that the proposed rules would boost consumer confidence, but added that some clauses needed clarification.

Reliance did not respond to request for comment.

The rules were announced last month amid growing complaints from India’s brick-and-mortar retailers that Amazon and Flipkart bypass foreign investment law using complex business structures. The companies deny any wrongdoing.

A Reuters investigation in February cited Amazon documents that showed it gave preferential treatment to a small number of its sellers and bypassed foreign investment rules. Amazon has said it does not give favourable treatment to any seller.

The Government will soon issue certain clarifications on the foreign investment rules, Commerce Minister Piyush Goyal told reporters on Friday.



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Latest News Today – Corporates Call For Ramping Up Investment In Health


A survey by industry body FICCI says that business houses seek greater investment in healthcare

The corporate sector has underlined the importance of ramping up investments in healthcare infrastructure in tier 2 and tier 3 cities and rural areas, which the Government should prioritise in order to brace up to any subsequent future wave of the Coronavirus pandemic.

Also the Government must take all steps to scale up vaccination drive in the country, several business houses have opined.

These are some of the findings of a survey conducted by industry body FICCI on nationwide businesses to assess the impact of the state-level lockdowns on them. Many companies have listed five priority areas which need immediate focus of the Government.

Apart from strengthening health infrastructure in small towns and villages, the respondents have sought that maintaining a sufficient pool of essential medicines for pandemic management and continuing with the newly created temporary facilities, as well as strengthening testing infrastructure and setting up a national facility for vaccine manufacturing, should form the core of the Government’s preparatory work.

According to the feedback received in the survey, the micro, small and medium enterprises (MSME) sector has faced the maximum brunt and there is an immediate need for relief to this sector. This view was expressed by nearly 65 per cent of the surveyed companies.

Among other measures listed by companies for relief, ease of compliances, moratorium for loan and interest payments and incentives for boosting demand, were the most significant.

The survey further showed that 58 per cent of the companies saw a ‘high impact’ on their businesses due to the state level lockdowns. Another 38 per cent reported ‘moderate impact’ on their operations due to the state level lockdowns.

With different parts of the country under varying sets of restrictions and consumer sentiment impacted due to the ferocity of the second wave, an evident dip in demand was witnessed by companies. Around 58 per cent of the surveyed companies reported ‘weak demand’ as the biggest challenge they are facing under the current environment.



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Latest News Today – Covid Second Wave Has Hit Domestic Demand, Says RBI


RBI has noted that second wave of pandemic has hit domestic demand the most

The Reserve Bank of India (RBI) has observed that the Indian economy continues to wrestle with the second wave of Coronavirus pandemic even though cautious optimism is returning. It has assessed that the second wave has basically hit domestic demand hard.

In its monthly bulletin for June 2021, the central bank has focussed on the overall state of the economy, India’s sovereign yield curve and the fiscal framework of the country, in the form of three articles.

Commenting on the state of the economy, the central bank has said that while the second wave has hit domestic demand, on the brighter side, several aspects of aggregate supply conditions – agriculture and contactless services are holding up, while industrial production and exports have surged compared to last year amidst pandemic protocols.

“Going forward, the speed and scale of vaccination will shape the path of recovery. The economy has the resilience and the fundamentals to bounce back from the pandemic and unshackle itself from pre-existing cyclical and structural hindrances,” it said.

In the macroeconomic view of India’s sovereign yield curve, RBI found that the level of the yield curve has undergone a downward shift from the second quarter of 2019, reflecting the ultra-accommodative stance of monetary policy.

On the fiscal framework and quality of expenditure in India, the RBI noted in its study that the Coronavirus pandemic necessitated an overwhelming fiscal response from governments across the world.

“As India unwinds the fiscal stimulus and embarks on the path of fiscal adjustment, it is necessary to emphasise on ‘how’ over ‘how much’. This article proposes a few quantifiable indicators, i.e. ratios of revenue expenditure to capital outlay and revenue deficit to gross fiscal deficit along with threshold levels for them, that can be suitably blended into the fiscal fabric for a sustainable growth trajectory,” the RBI bulletin has noted.



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Latest News Today – Sitharaman Tells Corporates Government Is Committed to


Finance Minister Nirmala Sitharaman speaks with industry chambers

Finance Minister Nirmala Sitharaman today brainstormed with industry chambers regarding their concerns over the Centre’s management of Corona virus pandemic.

She informed through a tweet that the government will continue to work with states to save lives and livelihood.

Ms Sitharaman said that she sought feedback from businesses to deal with the impact of the second COVID-19 wave on the country’s economy.

Domestic economy had contracted by a whopping 23.9 per cent in the first quarter (April-June) of the previous financial year due to the outbreak of the pandemic.

“Spoke on telephone with each of the following business/Chamber leaders. She Took their inputs on industry/Association related matters. Informed them that GoI at various levels from @PMOIndia is responding to #Covidmanagement. Working together with states for lives and livelihoods,” the Finance Minister said in a tweet.

She had interactions with heads of industry chambers including CII president Uday Kotak, Uday Shankar, president FICCI, and Vineet Agarwal, president of Assocham.

Ms Sitharaman also spoke to many business leaders like Tata Steel managing director T V Narendran, L&T chairman A M Naik, TCS managing director Rajesh Gopinathan, Maruti Suzuki chairman R C Bhargava, TVS Group chairman Venu Srinivasan and Hero Moto Corp managing director Pawan Munjal to take their feedback on the situation arising out of surging COVID-19 cases and local containments.

Last week, the Finance Minister made it clear that the government would not go for lockdowns in a big way and only resort to local containment to break the COVID-19 chain.



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