Benchmark equity indices witnessed heavy selloff Friday after investors booked profits in realty, banking, IT and auto bluechips amid weak signals from global markets.

The BSE Sensex plunged 689.60 points, or 1.89 per cent, to 35,742.07, while the NSE Nifty slipped 197.70 points, or 1.81 per cent, to 10,754&nbsp;as the possibility of a US&nbsp;government shutdown and further rate hikes by the Federal Reserve next year made investors jittery.

The 30-share index ended the week 527.93 points lower, while the broader Nifty lost 134 points.

The equity market witnessed selling ahead of the weekend, mainly due to fears of lower global economic growth in the coming year, said Joseph Thomas, Head Research- Emkay Wealth Management.

Concerns over the rupee also loomed over IT and tech stocks, analysts said.

Benchmark indices <a href="http://www.wionews.com/business-economy/sensex-falls-100-points-in-early-hours-amid-us-government-shutdown-tension-185589">opened on a choppy note Friday on negative global cues </a>amid fears of a potential US government shutdown and rising tension between the US and China.

After falling over 100 points in the opening session, the 30-share Sensex was trading 14.82 points or 0.04 per cent, higher at 36,416.85. The index had finished 52.66 points, or 0.14 per cent, lower at 36,431.67 Thursday.

The NSE Nifty, too, was trading 2.25 points, or 0.02 per cent, lower at 10,949.45.

Domestic and other Asian stocks followed Wall Street that fell sharply after US President Donald Trump's demand for border wall funds pushed the federal government closer to a shutdown.

The White House said Trump will not travel to Florida Friday for the Christmas holiday if the government is shutting down. More than 8,00,000 federal workers will be facing furloughs or forced to work without pay if a resolution is not reached before funding expires at midnight Friday.

Meanwhile, China accused the US of fabricating facts after the US Justice Department indicted two hackers tied to Chinese security services who allegedly targeted companies and agencies in a dozen countries, adding fuel to the rift between the two countries, experts said.

Benchmark equity indices witnessed heavy selloff Friday after investors booked profits in realty, banking, IT and auto bluechips amid weak signals from global markets.

Benchmark equity indices witnessed heavy selloff Friday after investors booked profits in realty, banking, IT and auto bluechips amid weak signals from global markets. The BSE Sensex plunged 689.60 points, or 1.89 per cent, to 35,742.07, while the NSE Nifty slipped 197.70 points, or 1.81 per cent, to 10,754 as the possibility of a US government shutdown and further rate hikes by the Federal Reserve next year made investors jittery. The 30-share index ended the week 527.93 points lower, while the broader Nifty lost 134 points. The equity market witnessed selling ahead of the weekend, mainly due to fears of lower global economic growth in the coming year, said Joseph Thomas, Head Research- Emkay Wealth Management. Concerns over the rupee also loomed over IT and tech stocks, analysts said. Benchmark indices opened on a choppy note Friday on negative global cues amid fears of a potential US government shutdown and rising tension between the US and China. After falling over 100 points in the opening session, the 30-share Sensex was trading 14.82 points or 0.04 per cent, higher at 36,416.85. The index had finished 52.66 points, or 0.14 per cent, lower at 36,431.67 Thursday. The NSE Nifty, too, was trading 2.25 points, or 0.02 per cent, lower at 10,949.45. Domestic and other Asian stocks followed Wall Street that fell sharply after US President Donald Trump's demand for border wall funds pushed the federal government closer to a shutdown. The White House said Trump will not travel to Florida Friday for the Christmas holiday if the government is shutting down. More than 8,00,000 federal workers will be facing furloughs or forced to work without pay if a resolution is not reached before funding expires at midnight Friday. Meanwhile, China accused the US of fabricating facts after the US Justice Department indicted two hackers tied to Chinese security services who allegedly targeted companies and agencies in a dozen countries, adding fuel to the rift between the two countries, experts said.

Sensex plunges nearly 700 points amid fears of US government shutdown

Former prime minister Manmohan Singh Tuesday said the relationship between the government and the RBI is like that of "husband-wife" and the difference of opinions must be resolved in a manner that the two institutions work in harmony.

The comments came against the backdrop of Urjit Patel resigning as RBI Governor earlier this month amid a tussle between the central bank and the finance ministry on matters ranging from the appropriate size of reserves the central bank must hold to the easing of lending norms for sectors such as small and medium enterprises.

Talking to reporters on the sidelines of the launch of his six-volume series of books titled 'Changing India' here, Singh, who is also a former RBI governor, said one has to respect the autonomy and the independence of the Reserve Bank of India (RBI).

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"At the same time, I would say the relation between government and RBI is like husband-wife relationship. There will be hiccups, there will be difference of opinion, but ultimately these must be harmonised in a manner that these two great institutions can work in harmony," Singh said.

Following the resignation of Patel, the government appointed former Economic Affairs Secretary Shaktikanta Das, who spearheaded normalisation of economy post demonetisation of November 2016, as new RBI Governor.

"Whosoever is Governor of RBI, I wish him well," Singh said.

The former PM and Rajya Sabha member further said "we need" a strong and independent RBI which has to work in close cooperation with the central government.

"I do hope and pray that the government and the RBI find a way to work together," he added.

On questions related to farm loan waivers announced by the new governments in Madhya Pradesh and Chhattisgarh, Singh said "we have to honour" the commitment that is part of the election manifesto which went to poll.

"I haven't studied the impact but since the commitment has been made so we have to honour it," he said and added the loan waiver was a commitment made to people of the two states and what has been promised has to be delivered.&nbsp;

Former prime minister Manmohan Singh Tuesday said the relationship between the government and the RBI is like that of "husband-wife" and the difference of opinions must be resolved in a manner that the two institutions work in harmony.

Former prime minister Manmohan Singh Tuesday said the relationship between the government and the RBI is like that of "husband-wife" and the difference of opinions must be resolved in a manner that the two institutions work in harmony. The comments came against the backdrop of Urjit Patel resigning as RBI Governor earlier this month amid a tussle between the central bank and the finance ministry on matters ranging from the appropriate size of reserves the central bank must hold to the easing of lending norms for sectors such as small and medium enterprises. Talking to reporters on the sidelines of the launch of his six-volume series of books titled 'Changing India' here, Singh, who is also a former RBI governor, said one has to respect the autonomy and the independence of the Reserve Bank of India (RBI). Former PM Manmohan Singh: The strong, independent Reserve Bank of India has to work in close cooperation with the central govt. So I do hope & pray that Reserve Bank & the Govt of India would find ways and means to work in harmony with each other. pic.twitter.com/uiRvw4xFWQ — ANI (@ANI) December 18, 2018 × "At the same time, I would say the relation between government and RBI is like husband-wife relationship. There will be hiccups, there will be difference of opinion, but ultimately these must be harmonised in a manner that these two great institutions can work in harmony," Singh said. Following the resignation of Patel, the government appointed former Economic Affairs Secretary Shaktikanta Das, who spearheaded normalisation of economy post demonetisation of November 2016, as new RBI Governor. "Whosoever is Governor of RBI, I wish him well," Singh said. The former PM and Rajya Sabha member further said "we need" a strong and independent RBI which has to work in close cooperation with the central government. "I do hope and pray that the government and the RBI find a way to work together," he added. On questions related to farm loan waivers announced by the new governments in Madhya Pradesh and Chhattisgarh, Singh said "we have to honour" the commitment that is part of the election manifesto which went to poll. "I haven't studied the impact but since the commitment has been made so we have to honour it," he said and added the loan waiver was a commitment made to people of the two states and what has been promised has to be delivered.

Govt-RBI relationship like that of husband-wife: Ex-PM Manmohan Singh 

Qatar's private sector grew by almost 6 per cent in 2018 despite volatile oil prices, its finance minister said on Saturday.

Last year the economy saw outflows, but 2018 was a good year with most of the growth coming from the private sector, Ali Sharif al-Emadi told the Doha Forum on Saturday.

Qatar's public sector institutions, including its sovereign wealth fund, had injected more $40 billion into Qatari banks during the initial months of its rift with Saudi Arabia and its allies to help the banking sector mitigate the impact of fund outflows.

Qatar's private sector grew by almost 6 per cent in 2018 despite volatile oil prices, its finance minister said on Saturday. Last year the economy saw outflows, but 2018 was a good year with most of the growth coming from the private sector, Ali Sharif al-Emadi told the Doha Forum on Saturday.

Qatar's private sector grew by almost 6 per cent in 2018 despite volatile oil prices, its finance minister said on Saturday. Last year the economy saw outflows, but 2018 was a good year with most of the growth coming from the private sector, Ali Sharif al-Emadi told the Doha Forum on Saturday. Qatar's public sector institutions, including its sovereign wealth fund, had injected more $40 billion into Qatari banks during the initial months of its rift with Saudi Arabia and its allies to help the banking sector mitigate the impact of fund outflows.

Qatar's private sector grew almost 6% in 2018 despite oil price volatility

The government will stick to the 3.3 per cent fiscal deficit target in the current financial year, Finance Minister Arun Jaitley said Friday.

He also said India will clock a growth rate of 7-8 per cent despite global uncertainties and will retain the tag of the world's fastest growing major economy.

"Our ability to be within that 7-8 percent range is fairly certain though I see comments to the contrary but I am fairly certain.&nbsp;

"Even in this year, despite all the odds, we will be able to maintain our fiscal targets because when current account deficits are impacted by oil prices and strengthening dollar, the last thing that India can afford is to run itself into a twin deficit situation because a fallout of that is very serious," Jaitley said while addressing the annual general meeting of industry body FICCI here.

The government has budgeted to contain fiscal deficit at 3.3 per cent of the GDP in the current fiscal, lower than 3.5 per cent in 2017-18.

As per latest data, fiscal deficit in April-October period stood at 103.9 per cent of budget estimates.

Jaitley said oil prices have a direct impact on India, since the country is a major importer. India, he said, has a particular resistance capacity to deal with rising crude oil prices and when it breaches the limit, it can impact inflation, currency and the current account deficit (CAD).

The CAD, which is the difference between the inflow and outflow of foreign exchange, widened to 2.9 per cent of GDP in the July-September quarter from 2.4 per cent of GDP in April-June.

"When the global challenges stare us in the face, we want at least our internal domestic capacities be strengthened to put up our resistance. Indian economy is now fairly large for us to display a certain level of resilience not withstanding the adverse global trends, IMF forecast of slight slowdown. We still maintain our position as the fastest amongst the major economies in terms of growth," the minister said.

Listing out the challenges to the economy, Jaitley said there is a need to get out of the "syndrome of difficulties in credit" and improve the liquidity situation in the market.

The second challenge is "even when the election year debate goes on, many like you (industry) will have to flag to different players in the political system the importance of sound policy and how much they can be blended with good politics".

Jaitley said India cannot afford to have fragile coalitions for stable policy decisions and continue on the path of reforms.

"...You need a decisive leadership, you can't have fragile coalitions because at the end of the day if one partner says I can pull down the government if you don't declare my state as special status, then those worse off can even say why not me? And you would have half a dozen wanting a special status," he said.

He said a coalition government would lead to a situation where the country probably will have a helpless Centre dependent on these kind of players.

"And what the founders of our nation envisaged that India, which is Bharat, which is a union of states, then ending up as a confederation of states and that is the last thing that India can afford.&nbsp;

"If you need policy clarity, you will need policy and directional stability and you will need a decisive leadership which moves in that direction which will then create an economy which is fast growing with various market reforms," Jaitley said.

The minister also said that under Ayushman Bharat scheme as many as 5 lakh poor people got free medical treatment in the last two-and-a-half months.

Prime Minister Narendra Modi in September launched the Ayushman Bharat - Pradhan Mantri Jan Aarogya Yojana which aims to provide a coverage of Rs 5 lakh per family annually, benefiting more than 10.74 crore poor families for secondary and tertiary care hospitalisation through a network of empanelled health care providers.&nbsp;

The government will stick to the 3.3 per cent fiscal deficit target in the current financial year, Finance Minister Arun Jaitley said Friday. He also said India will clock a growth rate of 7-8 per cent despite global uncertainties and will retain the tag of the world's fastest growing major economy.

The government will stick to the 3.3 per cent fiscal deficit target in the current financial year, Finance Minister Arun Jaitley said Friday. He also said India will clock a growth rate of 7-8 per cent despite global uncertainties and will retain the tag of the world's fastest growing major economy. "Our ability to be within that 7-8 percent range is fairly certain though I see comments to the contrary but I am fairly certain. "Even in this year, despite all the odds, we will be able to maintain our fiscal targets because when current account deficits are impacted by oil prices and strengthening dollar, the last thing that India can afford is to run itself into a twin deficit situation because a fallout of that is very serious," Jaitley said while addressing the annual general meeting of industry body FICCI here. The government has budgeted to contain fiscal deficit at 3.3 per cent of the GDP in the current fiscal, lower than 3.5 per cent in 2017-18. As per latest data, fiscal deficit in April-October period stood at 103.9 per cent of budget estimates. Jaitley said oil prices have a direct impact on India, since the country is a major importer. India, he said, has a particular resistance capacity to deal with rising crude oil prices and when it breaches the limit, it can impact inflation, currency and the current account deficit (CAD). The CAD, which is the difference between the inflow and outflow of foreign exchange, widened to 2.9 per cent of GDP in the July-September quarter from 2.4 per cent of GDP in April-June. "When the global challenges stare us in the face, we want at least our internal domestic capacities be strengthened to put up our resistance. Indian economy is now fairly large for us to display a certain level of resilience not withstanding the adverse global trends, IMF forecast of slight slowdown. We still maintain our position as the fastest amongst the major economies in terms of growth," the minister said. Listing out the challenges to the economy, Jaitley said there is a need to get out of the "syndrome of difficulties in credit" and improve the liquidity situation in the market. The second challenge is "even when the election year debate goes on, many like you (industry) will have to flag to different players in the political system the importance of sound policy and how much they can be blended with good politics". Jaitley said India cannot afford to have fragile coalitions for stable policy decisions and continue on the path of reforms. "...You need a decisive leadership, you can't have fragile coalitions because at the end of the day if one partner says I can pull down the government if you don't declare my state as special status, then those worse off can even say why not me? And you would have half a dozen wanting a special status," he said. He said a coalition government would lead to a situation where the country probably will have a helpless Centre dependent on these kind of players. "And what the founders of our nation envisaged that India, which is Bharat, which is a union of states, then ending up as a confederation of states and that is the last thing that India can afford. "If you need policy clarity, you will need policy and directional stability and you will need a decisive leadership which moves in that direction which will then create an economy which is fast growing with various market reforms," Jaitley said. The minister also said that under Ayushman Bharat scheme as many as 5 lakh poor people got free medical treatment in the last two-and-a-half months. Prime Minister Narendra Modi in September launched the Ayushman Bharat - Pradhan Mantri Jan Aarogya Yojana which aims to provide a coverage of Rs 5 lakh per family annually, benefiting more than 10.74 crore poor families for secondary and tertiary care hospitalisation through a network of empanelled health care providers.

Government will stick to fiscal target this year: Jaitley

More than 700,000 undocumented Afghans have returned from Iran this year as the Iranian economy tightens, with a knock-on effect on the Afghan economy, according to data from the UN's migration agency.

In a report covering the period up to December 1, the International Organization for Migration said a total of 752,325 Afghans had returned from Iran and Pakistan, including 721,633 from Iran.

"Undocumented returns from Iran, in particular, are seeing a massive increase over previous years, largely driven by recent political and economic issues in Iran including massive currency devaluation," the IOM report said.

Demand for Afghan labour in Iran's informal economy had drastically fallen, it added.

"As all Afghans typically send home their earnings in the form of monthly remittances, the Afghan economy itself, already evident in the drought-affected provinces of Herat, Badghis and Ghor, is suffering direct and immediate effects."

Iranian media reports say many of the Afghans had returned or were seeking to enter Turkey to reach Europe after the fall of the Iranian currency, which has lost about 70 per cent of its value this year.

Iran emerged in early 2016 from years of global sanctions under a deal with world powers that curbed its disputed nuclear programme.

But US President Donald Trump withdrew the United States from the deal in May, calling it flawed to Iran's advantage, and reimposed far-reaching US sanctions in phases, with the most damaging oil and banking penalties taking effect on November 5.

Jan Egeland, head of the Norwegian Refugee Council, told Reuters that increasing US pressure on Iran would cause problems for Afghanistan.

“The Trump sanctions will put the Iranian economy into a void and is doing that. (The people) who will first lose a grip on their existence are the Afghan registered and unregistered refugees and migrants," he said.

Last month the top UN humanitarian official in Afghanistan, Toby Lanzer, told reporters in Geneva that the UN had expected up to 700,000 Afghans to return from Pakistan this year, but very few had made the move, while the returns from Iran took the UN by surprise.

More than 700,000 undocumented Afghans have returned from Iran this year as the Iranian economy tightens, with a knock-on effect on the Afghan economy, according to data from the UN's migration agency.

More than 700,000 undocumented Afghans have returned from Iran this year as the Iranian economy tightens, with a knock-on effect on the Afghan economy, according to data from the UN's migration agency. In a report covering the period up to December 1, the International Organization for Migration said a total of 752,325 Afghans had returned from Iran and Pakistan, including 721,633 from Iran. "Undocumented returns from Iran, in particular, are seeing a massive increase over previous years, largely driven by recent political and economic issues in Iran including massive currency devaluation," the IOM report said. Demand for Afghan labour in Iran's informal economy had drastically fallen, it added. "As all Afghans typically send home their earnings in the form of monthly remittances, the Afghan economy itself, already evident in the drought-affected provinces of Herat, Badghis and Ghor, is suffering direct and immediate effects." Iranian media reports say many of the Afghans had returned or were seeking to enter Turkey to reach Europe after the fall of the Iranian currency, which has lost about 70 per cent of its value this year. Iran emerged in early 2016 from years of global sanctions under a deal with world powers that curbed its disputed nuclear programme. But US President Donald Trump withdrew the United States from the deal in May, calling it flawed to Iran's advantage, and reimposed far-reaching US sanctions in phases, with the most damaging oil and banking penalties taking effect on November 5. Jan Egeland, head of the Norwegian Refugee Council, told Reuters that increasing US pressure on Iran would cause problems for Afghanistan. “The Trump sanctions will put the Iranian economy into a void and is doing that. (The people) who will first lose a grip on their existence are the Afghan registered and unregistered refugees and migrants," he said. Last month the top UN humanitarian official in Afghanistan, Toby Lanzer, told reporters in Geneva that the UN had expected up to 700,000 Afghans to return from Pakistan this year, but very few had made the move, while the returns from Iran took the UN by surprise.

More than 700,000 Afghans leave Iran as economy slows

Former Union Finance Minister P Chidambaram on Saturday said that the ruling party's jubilation over the GDP growth data is unwarranted.&nbsp;

The senior Congress leader noted that more large companies are bankrupt today than before and many projects are "stranded than ever." "There is a sense of crisis," he stated.&nbsp;

In a series of tweets, the former finance minister said that as expected, the GDP growth in the July-September quarter (Q2) of 2018-19 was a good one per cent lower than in the April-June quarter (Q1).

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The new normal for the Indian economy is 7 per cent and 2018-19 will be a normal year.
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"Q1 number was on a very low base in the previous year. It did not signify a bump in growth and did not warrant the jubilation of the BJP three months ago," he said.

"More large companies are bankrupt today than ever before, more projects stranded than ever before, more accounts turned NPA than ever before, more banks have been restrained from lending than ever before. There is a sense of crisis everywhere," Chidambaram noted.&nbsp;

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Former Finance Minister P Chidambaram: More large companies are bankrupt today than ever before,more projects stranded than ever before,more accounts turned NPA than ever before,more banks have been restrained from lending than ever before. There is a sense of crisis everywhere. <a href="https://t.co/vv3cL3TVnB">pic.twitter.com/vv3cL3TVnB</a>
— ANI (@ANI) <a href="https://twitter.com/ANI/status/1068750425627619328?ref_src=twsrc%5Etfw">December 1, 2018</a></blockquote>
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"The new normal for the Indian economy is 7 per cent and 2018-19 will be a normal year," he said.

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Former Finance Minister P Chidambaram: This government promised a double-digit growth rate. They have not achieved double-digit growth rate in any of the four years. And they will not achieve it in the last year also. <a href="https://t.co/ro0XwptdA9">pic.twitter.com/ro0XwptdA9</a>
— ANI (@ANI) <a href="https://twitter.com/ANI/status/1068754558589952002?ref_src=twsrc%5Etfw">December 1, 2018</a></blockquote>
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India's economy grew at 7.1 per cent in the July-September quarter, the lowest in three quarters, but still remained ahead of China to retain the tag of the world's fastest-growing major economy, news agency PTI reported.&nbsp;

India's $2.6 trillion economy, Asia's third largest, grew 6.3 per cent in the July-September quarter of 2017, the data released by the statistics ministry showed.

India had recorded 7.9 per cent mark in the fourth quarter FY16, this time, however, it was lower than expected.

Former Union Finance Minister P Chidambaram on Saturday said that the ruling party's jubilation over the GDP growth data is unwarranted. The senior Congress leader noted that more large companies are bankrupt today than before and many projects are "stranded than ever.

Former Union Finance Minister P Chidambaram on Saturday said that the ruling party's jubilation over the GDP growth data is unwarranted. The senior Congress leader noted that more large companies are bankrupt today than before and many projects are "stranded than ever." "There is a sense of crisis," he stated. In a series of tweets, the former finance minister said that as expected, the GDP growth in the July-September quarter (Q2) of 2018-19 was a good one per cent lower than in the April-June quarter (Q1). The new normal for the Indian economy is 7 per cent and 2018-19 will be a normal year. — P. Chidambaram (@PChidambaram_IN) November 30, 2018 × "Q1 number was on a very low base in the previous year. It did not signify a bump in growth and did not warrant the jubilation of the BJP three months ago," he said. "More large companies are bankrupt today than ever before, more projects stranded than ever before, more accounts turned NPA than ever before, more banks have been restrained from lending than ever before. There is a sense of crisis everywhere," Chidambaram noted. Former Finance Minister P Chidambaram: More large companies are bankrupt today than ever before,more projects stranded than ever before,more accounts turned NPA than ever before,more banks have been restrained from lending than ever before. There is a sense of crisis everywhere. pic.twitter.com/vv3cL3TVnB — ANI (@ANI) December 1, 2018 × "The new normal for the Indian economy is 7 per cent and 2018-19 will be a normal year," he said. Former Finance Minister P Chidambaram: This government promised a double-digit growth rate. They have not achieved double-digit growth rate in any of the four years. And they will not achieve it in the last year also. pic.twitter.com/ro0XwptdA9 — ANI (@ANI) December 1, 2018 × India's economy grew at 7.1 per cent in the July-September quarter, the lowest in three quarters, but still remained ahead of China to retain the tag of the world's fastest-growing major economy, news agency PTI reported. India's $2.6 trillion economy, Asia's third largest, grew 6.3 per cent in the July-September quarter of 2017, the data released by the statistics ministry showed. India had recorded 7.9 per cent mark in the fourth quarter FY16, this time, however, it was lower than expected.

No cause for ruling's party's jubilation over growth rate, there's crisis everywhere: Chidambaram

Share markets ticked slightly lower in early Asian trade on Friday as investors await a closely watched meeting between the Chinese and US&nbsp;presidents in Argentina this weekend for signs of a trade war detente.

MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.1 per cent. In Japan, the Nikkei was up 0.2 per cent.

The mostly muted market moves followed a mixed day on Wall Street, where stocks swung between losses and gains to ultimately end lower, amid conflicting signals on the outlook for trade talks.

The Dow Jones Industrial Average fell 0.11 per cent, to 25,338.84, the S&amp;P 500 lost 0.22 per cent to 2,737.8 and the Nasdaq Composite dropped 0.25 per cent to 7,273.08 at Thursday's close.

US&nbsp;stock market futures pointed to more weakness on Friday, with S&amp;P e-mini futures ticking down 0.14 per cent to 2,740.5.

Investors are waiting for a meeting between Chinese President Xi Jinping and US&nbsp;President Donald Trump, at which the leaders are expected to discuss the countries'&nbsp;bruising trade war.

Adding to apprehension ahead of the weekend meeting were comments from a US&nbsp;official, who said White House trade adviser Peter Navarro, who has advocated a tougher trade stance with China, would attend.

Mixed signals from Washington about the prospects for a rapprochement with China on trade have led many investors to sit on the sidelines.

"Rather than jump at headlines, the market has taken a laid-back approach and prices are treading water until we see the outcome," analysts at National Australia Bank said in a morning note.

Defying the subdued mood, Australian shares were 1.1 per cent weaker, dragged lower by maker Coca-Cola Amatil Ltd , which fell 12.1 per cent on a weak outlook for 2019.

"They billed it as another transformational year, which fund managers think means profit growth is not going to be that good," said William O'Loughlin, investment analyst at Rivkin Securities in Sydney.

Global investors also remain hesitant to shift positions significantly as they seek clarity on Federal Reserve policy direction.&nbsp;

Minutes of the latest Fed policy meeting showed that almost all officials agreed another interest rate increase was "likely to be warranted fairly soon," but opened debate on when to pause further hikes and how to relay those plans to the public.

The minutes follow comments from Federal Chairman Jerome Powell earlier this week that some took as indicating a dovish shift.

The yield on two-year US&nbsp;Treasury notes , seen as sensitive to expectations of higher Fed fund rates, was at 2.8066 per cent on Friday, down from a US&nbsp;close of 2.813 per cent.

Benchmark 10-year Treasury notes yielded 3.0261 per cent, compared with a US&nbsp;close of 3.035 per cent on Thursday.&nbsp;

The dollar dropped 0.08 per cent against the yen to 113.38 , while the euro was flat at $1.1391.

In commodities markets, US&nbsp;crude prices retreated after rising on news that Russia is increasingly convinced it needs to reduce oil output along with the Organisation of the Petroleum Exporting Countries (OPEC). OPEC and its allies are meeting in Vienna on Dec. 6-7.

US&nbsp;crude dipped 0.1 per cent at $51.41 a barrel.&nbsp;

Spot gold rose 0.06 per cent to $1,224.38 per ounce.

Share markets ticked slightly lower in early Asian trade on Friday as investors await a closely watched meeting between the Chinese and US presidents in Argentina this weekend for signs of a trade war detente.

Share markets ticked slightly lower in early Asian trade on Friday as investors await a closely watched meeting between the Chinese and US presidents in Argentina this weekend for signs of a trade war detente. MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.1 per cent. In Japan, the Nikkei was up 0.2 per cent. The mostly muted market moves followed a mixed day on Wall Street, where stocks swung between losses and gains to ultimately end lower, amid conflicting signals on the outlook for trade talks. The Dow Jones Industrial Average fell 0.11 per cent, to 25,338.84, the S&P 500 lost 0.22 per cent to 2,737.8 and the Nasdaq Composite dropped 0.25 per cent to 7,273.08 at Thursday's close. US stock market futures pointed to more weakness on Friday, with S&P e-mini futures ticking down 0.14 per cent to 2,740.5. Investors are waiting for a meeting between Chinese President Xi Jinping and US President Donald Trump, at which the leaders are expected to discuss the countries' bruising trade war. Adding to apprehension ahead of the weekend meeting were comments from a US official, who said White House trade adviser Peter Navarro, who has advocated a tougher trade stance with China, would attend. Mixed signals from Washington about the prospects for a rapprochement with China on trade have led many investors to sit on the sidelines. "Rather than jump at headlines, the market has taken a laid-back approach and prices are treading water until we see the outcome," analysts at National Australia Bank said in a morning note. Defying the subdued mood, Australian shares were 1.1 per cent weaker, dragged lower by maker Coca-Cola Amatil Ltd , which fell 12.1 per cent on a weak outlook for 2019. "They billed it as another transformational year, which fund managers think means profit growth is not going to be that good," said William O'Loughlin, investment analyst at Rivkin Securities in Sydney. Global investors also remain hesitant to shift positions significantly as they seek clarity on Federal Reserve policy direction. Minutes of the latest Fed policy meeting showed that almost all officials agreed another interest rate increase was "likely to be warranted fairly soon," but opened debate on when to pause further hikes and how to relay those plans to the public. The minutes follow comments from Federal Chairman Jerome Powell earlier this week that some took as indicating a dovish shift. The yield on two-year US Treasury notes , seen as sensitive to expectations of higher Fed fund rates, was at 2.8066 per cent on Friday, down from a US close of 2.813 per cent. Benchmark 10-year Treasury notes yielded 3.0261 per cent, compared with a US close of 3.035 per cent on Thursday. The dollar dropped 0.08 per cent against the yen to 113.38 , while the euro was flat at $1.1391. In commodities markets, US crude prices retreated after rising on news that Russia is increasingly convinced it needs to reduce oil output along with the Organisation of the Petroleum Exporting Countries (OPEC). OPEC and its allies are meeting in Vienna on Dec. 6-7. US crude dipped 0.1 per cent at $51.41 a barrel. Spot gold rose 0.06 per cent to $1,224.38 per ounce.

Asian shares soften as investors look to G20 summit

Former president Pranab Mukherjee Wednesday expressed dissatisfaction over India’s economic growth and said the country should have been a five to six trillion US dollar economy. Addressing students of Greenwood High International School on the topic ‘Value of education in today’s scenario,’ Mukherjee said India has the potential to become a global economic power.

Replying to a query on how students can contribute to India’s journey to become a global economic power, Mukherjee said, “India is bound to be a global economic power. Today, as I have mentioned to you, the Indian economy is worth 2.268 trillion US dollar. I am not satisfied. As a former finance minister, I think we should have done much more progress. It should have been five to six trillion US dollar economy.”

Recalling India’s progress from the time when it was not able to even manufacture a fountain pen during the colonial era, Mukherjee said the 71 years of independence and 68 years of planning resulted in India rising to become one of the largest economies. “We are the third military power of the world,” he said.

Mukherjee highlighted the country’s achievements in science and technology besides space research. “We are the only country till today out of 184 members of the United Nations, who succeeded in sending its orbiter to Mars in its very first attempt,” Mukherjee said.

To a question on how a leader should handle criticism, Mukherjee said, “Criticism is part of life, criticism is not always bad, it is not always negative.” Mukherjee also emphasised on access to quality education to all.

Former president Pranab Mukherjee Wednesday expressed dissatisfaction over India’s economic growth and said the country should have been a five to six trillion US dollar economy.

Former president Pranab Mukherjee Wednesday expressed dissatisfaction over India’s economic growth and said the country should have been a five to six trillion US dollar economy. Addressing students of Greenwood High International School on the topic ‘Value of education in today’s scenario,’ Mukherjee said India has the potential to become a global economic power. Replying to a query on how students can contribute to India’s journey to become a global economic power, Mukherjee said, “India is bound to be a global economic power. Today, as I have mentioned to you, the Indian economy is worth 2.268 trillion US dollar. I am not satisfied. As a former finance minister, I think we should have done much more progress. It should have been five to six trillion US dollar economy.” Recalling India’s progress from the time when it was not able to even manufacture a fountain pen during the colonial era, Mukherjee said the 71 years of independence and 68 years of planning resulted in India rising to become one of the largest economies. “We are the third military power of the world,” he said. Mukherjee highlighted the country’s achievements in science and technology besides space research. “We are the only country till today out of 184 members of the United Nations, who succeeded in sending its orbiter to Mars in its very first attempt,” Mukherjee said. To a question on how a leader should handle criticism, Mukherjee said, “Criticism is part of life, criticism is not always bad, it is not always negative.” Mukherjee also emphasised on access to quality education to all.

India should have been a $5-6 trillion economy now: Pranab Mukherjee

Rising for the eighth straight day, the rupee climbed 39 paise to 70.30 against the US dollar in early trade Monday, as global crude prices slipped below the $60 per barrel mark.

Traders said the weakness in the greenback against some currencies overseas and a higher opening of domestic equities supported the rupee.

At the interbank forex market, the rupee opened higher at 70.48 and rose further to quote at 70.30, showing a rise of 39 paise over its previous close.

The rupee had rallied 77 paise to end at 70.69 against the US dollar Thursday, in lock-step with softening crude oil prices and foreign capital inflows.

The forex market was closed Friday on account of Gurunanak Jayanti.

In the last seven trading sessions, the rupee has gained a healthy 220 paise.

Forex traders said the uptrend in the local unit was largely driven by foreign funds inflows to capital markets and softening crude oil prices.

Foreign funds poured in Rs 446.24 crore into the capital markets on a net basis Thursday, while domestic institutional investors also net bought shares worth Rs 49.68 crore, provisional data showed.

Globally, Brent crude, the international benchmark, slipped below the $60 per barrel mark and was trading at $59.47 per barrel Monday.

Meanwhile, the benchmark BSE Sensex opened on a positive note higher by 137.07 points, at 35,118.09 in opening trade.

Rising for the eighth straight day, the rupee climbed 39 paise to 70.30 against the US dollar in early trade Monday, as global crude prices slipped below the $60 per barrel mark.

Rising for the eighth straight day, the rupee climbed 39 paise to 70.30 against the US dollar in early trade Monday, as global crude prices slipped below the $60 per barrel mark. Traders said the weakness in the greenback against some currencies overseas and a higher opening of domestic equities supported the rupee. At the interbank forex market, the rupee opened higher at 70.48 and rose further to quote at 70.30, showing a rise of 39 paise over its previous close. The rupee had rallied 77 paise to end at 70.69 against the US dollar Thursday, in lock-step with softening crude oil prices and foreign capital inflows. The forex market was closed Friday on account of Gurunanak Jayanti. In the last seven trading sessions, the rupee has gained a healthy 220 paise. Forex traders said the uptrend in the local unit was largely driven by foreign funds inflows to capital markets and softening crude oil prices. Foreign funds poured in Rs 446.24 crore into the capital markets on a net basis Thursday, while domestic institutional investors also net bought shares worth Rs 49.68 crore, provisional data showed. Globally, Brent crude, the international benchmark, slipped below the $60 per barrel mark and was trading at $59.47 per barrel Monday. Meanwhile, the benchmark BSE Sensex opened on a positive note higher by 137.07 points, at 35,118.09 in opening trade.

Rupee rises 39 paise to 70.30 against US dollar in early trade

The BSE benchmark Sensex extended losses for the second session Wednesday by declining over 250 points on heavy selling in IT, teck, metal and auto stocks amid weak global cues. 
Besides, fresh foreign fund outflows further hurt trading sentiments.

However, crude oil's fall to one-year low in the global market on excess supply concerns, capped the fall in the indices.

The 30-share, after rising briefly to 35,494.25 at the outset, quickly slipped into the negative terrain in line with a weak trend at other Asian markets and touched a low of 35,112.49.

However, it pared early losses on emergence of buying after a higher opening of European shares. The index closed 274.71 points, or 0.77 per cent, down at 35,199.80. The gauge had lost 300.37 points Tuesday.

Also, the broader NSE Nifty, after shuttling between 10,562.35 and 10,671.30 points, finally settled 56.15 points, or 0.53 per cent down at 10,600.05.

Sentiments took a hit after broader Asian markets weakened, following a renewed sell-off on Wall Street Tuesday as energy shares dropped after crude oil prices plunged to a 13-month low amid weak earnings and US-China trade disputes, fuelling worries about economic growth, brokers said.

"Wednesday's action accentuates the recent divergence we have witnessed between India and advanced economies. While the Nasdaq Composite is down 7.2 per cent in the past month and the S&amp;P 500 is down 4.6 per cent, the Nifty50 is up 2.8 per cent in the same time," said Sunil Sharma, Chief Investment Officer, Sanctum Wealth Management.&nbsp;

During the day, midcaps rallied strongly while the Nifty ended lower. Separately, the action in PSU banks and financials also suggests that market fears around liquidity and credit rollovers are abating, he added.

Persistent fall in technology stocks globally, and rupee appreciating against the dollar in the past few days, are the key factors fuelling the negative sentiment in IT stocks, brokers said.

Stocks of software services exporter such as TCS, Infosys, Wipro and Tech Mahindra were the worst hit on the bourses with shares falling up to 3.55 per cent.

Other laggards were PowerGrid, RIL, Bajaj Auto, Tata Steel, M&amp;M, Hero MotoCorp, Vedanta, NTPC, IndusInd Bank, L&amp;T, ONGC, HDFC Ltd, ITC Ltd, ICICI Bank, HUL, Bharti Airtel and Coal India, falling up to 2.77 per cent.

Among the gainers, shares of private lender Yes Bank was the top performer, climbing 2.83 per cent after it reassured that the recent resignations bear no impact on the CEO selection process and that efforts are underway for mutual resolution with co-promoter Madhu Kapur and family.

Axis Bank, Adani Ports, SBI, Asian Paints, Maruti Suzuki, Sun Pharma, Tata Motors, HDFC Bank and Kotak Bank also ended higher with gains up to 2.20 per cent. 
 
Shares of aviation and oil marketing companies surged due to sharp drop of nearly 7 per cent in global crude oil prices.

Spicejet, Jet Airways and InterGlobe rose up to 5.63 per cent.

Shares of state-run oil marketing companies such as IOC, HPCL and BPCL, gained up to 1.76 per cent.

Brent crude, the oil prices international benchmark, fell 6.92 per cent to USD 62.17 a barrel on Tuesday on excess supply concerns.

Sector-wise, the BSE IT index emerged biggest loser by plunging 2.92 per cent, followed by teck 2.47 per cent, power 1.04 per cent, metal 0.78 per cent, capital goods 0.58 per cent and FMCG 0.26 per cent, oil&amp;gas 0.12 per cent and auto 0.08 per cent.

In contrast, realty, healthcare, consumer durables, bankex, PSU and infrastructure ended higher, rising up to 1.53 per cent.

Meanwhile, foreign institutional investors (FIIs) sold shares worth a net of Rs 753.17 crore, while domestic institutional investors (DIIs) offloaded shares worth Rs 44.06 crore Tuesday, as per provisional data.

Elsewhere in Asia, Japan's Nikkei fell 0.35 per cent, Korea's KOSPI down 0.29 per cent and Taiwan fell 0.03 per cent. However, Hong Kong's Hang Seng rose 0.51 per cent and Shanghai Composite Index up 0.21 per cent.

In Europe, most markets remained firm in their early session. Frankfurt's DAX rose 0.86 per cent, while Paris CAC up 0.58 per cent. London's FTSE too gained 0.83 per cent.&nbsp;

The BSE benchmark Sensex extended losses for the second session Wednesday by declining over 250 points on heavy selling in IT, teck, metal and auto stocks amid weak global cues.

The BSE benchmark Sensex extended losses for the second session Wednesday by declining over 250 points on heavy selling in IT, teck, metal and auto stocks amid weak global cues. Besides, fresh foreign fund outflows further hurt trading sentiments. However, crude oil's fall to one-year low in the global market on excess supply concerns, capped the fall in the indices. The 30-share, after rising briefly to 35,494.25 at the outset, quickly slipped into the negative terrain in line with a weak trend at other Asian markets and touched a low of 35,112.49. However, it pared early losses on emergence of buying after a higher opening of European shares. The index closed 274.71 points, or 0.77 per cent, down at 35,199.80. The gauge had lost 300.37 points Tuesday. Also, the broader NSE Nifty, after shuttling between 10,562.35 and 10,671.30 points, finally settled 56.15 points, or 0.53 per cent down at 10,600.05. Sentiments took a hit after broader Asian markets weakened, following a renewed sell-off on Wall Street Tuesday as energy shares dropped after crude oil prices plunged to a 13-month low amid weak earnings and US-China trade disputes, fuelling worries about economic growth, brokers said. "Wednesday's action accentuates the recent divergence we have witnessed between India and advanced economies. While the Nasdaq Composite is down 7.2 per cent in the past month and the S&P 500 is down 4.6 per cent, the Nifty50 is up 2.8 per cent in the same time," said Sunil Sharma, Chief Investment Officer, Sanctum Wealth Management. During the day, midcaps rallied strongly while the Nifty ended lower. Separately, the action in PSU banks and financials also suggests that market fears around liquidity and credit rollovers are abating, he added. Persistent fall in technology stocks globally, and rupee appreciating against the dollar in the past few days, are the key factors fuelling the negative sentiment in IT stocks, brokers said. Stocks of software services exporter such as TCS, Infosys, Wipro and Tech Mahindra were the worst hit on the bourses with shares falling up to 3.55 per cent. Other laggards were PowerGrid, RIL, Bajaj Auto, Tata Steel, M&M, Hero MotoCorp, Vedanta, NTPC, IndusInd Bank, L&T, ONGC, HDFC Ltd, ITC Ltd, ICICI Bank, HUL, Bharti Airtel and Coal India, falling up to 2.77 per cent. Among the gainers, shares of private lender Yes Bank was the top performer, climbing 2.83 per cent after it reassured that the recent resignations bear no impact on the CEO selection process and that efforts are underway for mutual resolution with co-promoter Madhu Kapur and family. Axis Bank, Adani Ports, SBI, Asian Paints, Maruti Suzuki, Sun Pharma, Tata Motors, HDFC Bank and Kotak Bank also ended higher with gains up to 2.20 per cent. Shares of aviation and oil marketing companies surged due to sharp drop of nearly 7 per cent in global crude oil prices. Spicejet, Jet Airways and InterGlobe rose up to 5.63 per cent. Shares of state-run oil marketing companies such as IOC, HPCL and BPCL, gained up to 1.76 per cent. Brent crude, the oil prices international benchmark, fell 6.92 per cent to USD 62.17 a barrel on Tuesday on excess supply concerns. Sector-wise, the BSE IT index emerged biggest loser by plunging 2.92 per cent, followed by teck 2.47 per cent, power 1.04 per cent, metal 0.78 per cent, capital goods 0.58 per cent and FMCG 0.26 per cent, oil&gas 0.12 per cent and auto 0.08 per cent. In contrast, realty, healthcare, consumer durables, bankex, PSU and infrastructure ended higher, rising up to 1.53 per cent. Meanwhile, foreign institutional investors (FIIs) sold shares worth a net of Rs 753.17 crore, while domestic institutional investors (DIIs) offloaded shares worth Rs 44.06 crore Tuesday, as per provisional data. Elsewhere in Asia, Japan's Nikkei fell 0.35 per cent, Korea's KOSPI down 0.29 per cent and Taiwan fell 0.03 per cent. However, Hong Kong's Hang Seng rose 0.51 per cent and Shanghai Composite Index up 0.21 per cent. In Europe, most markets remained firm in their early session. Frankfurt's DAX rose 0.86 per cent, while Paris CAC up 0.58 per cent. London's FTSE too gained 0.83 per cent.

Sensex drops 275 points, Nifty slips below 10,600 on global sell-off

Markets closed on a low note on Monday as Sensex tanked 345.56 points to end at 34,812.99. Nifty dipped by 103 points to 10,482.20, news agency PTI reported. Both indexes closed lower for a second straight session.

Indian shares closed 1 per cent lower on Monday, dragged by oil marketing companies and financials, while investors were cautious ahead of key inflation data due later in the day.

The Indian currency on Monday further weakened against the dollar, dipping by 54 paise to 73.04, owing to increased demand for the American currency from importers amid increasing global crude oil prices.

International benchmark Brent crude was trading higher by 2.04 per cent at $71.61 per barrel. &nbsp; &nbsp;

On Friday, the rupee rose by 50 paise to end at 72.50 per dollar on increased selling of the greenback by exporters amid softening crude oil prices, which slipped below the $70 per barrel mark, news agency PTI reported.&nbsp;

Markets on Monday opened in green with Sensex recovering over 155 points, while the NSE Nifty breached the 10,600-mark.&nbsp;

(With inputs from agencies)&nbsp;

Markets closed on a low note on Monday as Sensex tanked 345.56 points to end at 34,812.99. Nifty dipped by 103 points to 10,482.20, news agency PTI reported. Both indexes closed lower for a second straight session.

Markets closed on a low note on Monday as Sensex tanked 345.56 points to end at 34,812.99. Nifty dipped by 103 points to 10,482.20, news agency PTI reported. Both indexes closed lower for a second straight session. Indian shares closed 1 per cent lower on Monday, dragged by oil marketing companies and financials, while investors were cautious ahead of key inflation data due later in the day. The Indian currency on Monday further weakened against the dollar, dipping by 54 paise to 73.04, owing to increased demand for the American currency from importers amid increasing global crude oil prices. International benchmark Brent crude was trading higher by 2.04 per cent at $71.61 per barrel. On Friday, the rupee rose by 50 paise to end at 72.50 per dollar on increased selling of the greenback by exporters amid softening crude oil prices, which slipped below the $70 per barrel mark, news agency PTI reported. Markets on Monday opened in green with Sensex recovering over 155 points, while the NSE Nifty breached the 10,600-mark. (With inputs from agencies)

Markets close in red, Sensex tanks nearly 350 points TO 34,812.99

Retail inflation eased to 3.31 per cent in October from 3.70 per cent which was recorded in September, news agency ANI reported on Monday.&nbsp;

Meanwhile, consumer inflation was at around 6.1 per cent in October, compared with around 5.8 per cent in September, Reuters reported. India's September industrial output grew 4.5 per cent.

Earlier in August, retail inflation cooled to an 11-month low of 3.69 per cent. Experts attributed the drop mainly to a fall in prices of kitchen items, including fruits and vegetables.

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Retail inflation reduces to 3.31% in October from 3.70% in September <a href="https://t.co/pGEAGgEiZt">pic.twitter.com/pGEAGgEiZt</a>
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The inflation based on the Consumer Price Index (CPI) stood at 4.17 per cent in July and 3.28 per cent in August 2017, news agency PTI reported. In October 2017, the CPI was recorded at 3.58 per cent.

The Reserve Bank of India has been mandated to keep retail inflation at 4 per cent level, with a margin of 2 per cent on either side.

(With inputs from agencies)&nbsp;

Retail inflation eased to 3.31 per cent in October from 3.70 per cent which was recorded in September, news agency ANI reported on Monday. Meanwhile, consumer inflation was at around 6.

Retail inflation eased to 3.31 per cent in October from 3.70 per cent which was recorded in September, news agency ANI reported on Monday. Meanwhile, consumer inflation was at around 6.1 per cent in October, compared with around 5.8 per cent in September, Reuters reported. India's September industrial output grew 4.5 per cent. Earlier in August, retail inflation cooled to an 11-month low of 3.69 per cent. Experts attributed the drop mainly to a fall in prices of kitchen items, including fruits and vegetables. Retail inflation reduces to 3.31% in October from 3.70% in September pic.twitter.com/pGEAGgEiZt — ANI (@ANI) November 12, 2018 × The inflation based on the Consumer Price Index (CPI) stood at 4.17 per cent in July and 3.28 per cent in August 2017, news agency PTI reported. In October 2017, the CPI was recorded at 3.58 per cent. The Reserve Bank of India has been mandated to keep retail inflation at 4 per cent level, with a margin of 2 per cent on either side. (With inputs from agencies)

Retail inflation cools to 3.31% in October, was at 3.70% in September

Union Finance Minister Arun Jaitley on Sunday stated that the banking system needs further strengthening, news agency PTI reported.&nbsp;

Jaitley further added that although GST slowed down growth rate for two quarters, it rose after that.&nbsp;

Critics and cynics say GST slowed down economic growth, but it was a smoothly-implemented, monumental reform, the minister stated.

He also said that NPAs need to be minimised and steps taken in that regard are bearing fruits. &nbsp;

Jaitley's remarks follow former RBI Governor Raghuram Rajan comments wherein he blamed the indirect taxation reform for derailing India's growth story.

"You will always have critics and cynics who will come up and say it (GST) slowed down India's growth," Jaitley said, speaking at state-run Union Bank of India's 100th-anniversary celebrations event in Mumbai.

Jaitley said that the growth increased to 7 per cent, then to 7.7 per cent and went up till 8.2 per cent last quarter and specifically pointed out that this is much higher than the 5-6 per cent expansion achieved between 2012-14.

The Goods and Services Tax (GST), India's biggest tax reform since independence which came into force on July 1, 2017, had "disruptionist" impact on economic growth only for two quarters, he said.

Former RBI Governor Raghuram Rajan on Saturday launched an attack on the Central government, calling demonetisation and the Goods and Services Tax (GST) as the two major headwinds that held back India's economic growth last year.

Rajan added that the current seven per cent growth rate is not enough to meet the country's needs.

"The two successive shocks of demonetisation and the GST had a serious impact on growth in India. Growth has fallen off interestingly at a time when growth in the global economy has been peaking up," he said delivering the second Bhattacharya Lectureship on the Future of India.

"The reality is that seven is not enough for the kind of people coming into the labour market and we need jobs for them, So, we need more and cannot be satisfied at this level," he said.&nbsp;

"What happened in 2017 is that even as the world picked up, India went down. That reflects the fact that these blows (demonetisation and GST) have really really been hard blows...Because of these headwinds we have been held back," news agency PTI quoted Rajan.&nbsp;

(With inputs from PTI)&nbsp;

Union Finance Minister Arun Jaitley on Sunday stated that the banking system needs further strengthening, news agency PTI reported. Jaitley further added that although GST slowed down growth rate for two quarters, it rose after that.

Union Finance Minister Arun Jaitley on Sunday stated that the banking system needs further strengthening, news agency PTI reported. Jaitley further added that although GST slowed down growth rate for two quarters, it rose after that. Critics and cynics say GST slowed down economic growth, but it was a smoothly-implemented, monumental reform, the minister stated. He also said that NPAs need to be minimised and steps taken in that regard are bearing fruits. Jaitley's remarks follow former RBI Governor Raghuram Rajan comments wherein he blamed the indirect taxation reform for derailing India's growth story. "You will always have critics and cynics who will come up and say it (GST) slowed down India's growth," Jaitley said, speaking at state-run Union Bank of India's 100th-anniversary celebrations event in Mumbai. Jaitley said that the growth increased to 7 per cent, then to 7.7 per cent and went up till 8.2 per cent last quarter and specifically pointed out that this is much higher than the 5-6 per cent expansion achieved between 2012-14. The Goods and Services Tax (GST), India's biggest tax reform since independence which came into force on July 1, 2017, had "disruptionist" impact on economic growth only for two quarters, he said. Former RBI Governor Raghuram Rajan on Saturday launched an attack on the Central government, calling demonetisation and the Goods and Services Tax (GST) as the two major headwinds that held back India's economic growth last year. Rajan added that the current seven per cent growth rate is not enough to meet the country's needs. "The two successive shocks of demonetisation and the GST had a serious impact on growth in India. Growth has fallen off interestingly at a time when growth in the global economy has been peaking up," he said delivering the second Bhattacharya Lectureship on the Future of India. "The reality is that seven is not enough for the kind of people coming into the labour market and we need jobs for them, So, we need more and cannot be satisfied at this level," he said. "What happened in 2017 is that even as the world picked up, India went down. That reflects the fact that these blows (demonetisation and GST) have really really been hard blows...Because of these headwinds we have been held back," news agency PTI quoted Rajan. (With inputs from PTI)

GST is a 'monumental reform', hit growth for only 2 quarters: Jaitley

Demonetisation and the Goods and Services Tax (GST) are the two major headwinds that held back India's economic growth last year, former RBI Governor Raghuram Rajan has said, asserting that the current seven per cent growth rate is not enough to meet the country's needs.

Addressing an audience at the University of California in Berkley on Friday, Rajan said for four years -- 2012 to 2016 -- India was growing at a faster pace before it was hit by two major headwinds.&nbsp;

"The two successive shocks of demonetisation and the GST had a serious impact on growth in India. Growth has fallen off interestingly at a time when growth in the global economy has been peaking up," he said delivering the second Bhattacharya Lectureship on the Future of India.

Rajan said a growth rate of seven per cent per year for 25 years is "very very strong" growth, but in some sense this has become the new Hindu rate of growth, which earlier used to be three-and-a-half per cent, Rajan said.

"The reality is that seven is not enough for the kind of people coming into the labour market and we need jobs for them, So, we need more and cannot be satisfied at this level," he said.&nbsp;

Observing that India is sensitive to global growth, he said India has become a much more open economy, and if the world grows, it also grows more.&nbsp;

"What happened in 2017 is that even as the world picked up, India went down. That reflects the fact that these blows (demonetisation and GST) have really really been hard blows...Because of these headwinds we have been held back,"&nbsp;he said.&nbsp;

While India's growth is picking up again, there is the issue of oil prices, the economist noted referring to the huge reliance of India on import of oil for its energy needs.

With the oil prices going up, Rajan said things are going to be little tougher for the Indian economy, even though the country is recovering from the headwinds of demonetisation and initial hurdles in the implementation of the GST.

Commenting on the rising Non-Performing Assets (NPA), he said the best thing to do in such a situation is to "clean up".&nbsp;

It is essential to "deal up with the bad stuff", so that with clean balance sheets, banks can be put back on the track. "It has taken India far long to clean up the banks, partly because the system did not had instruments to deal with bad debts," Rajan said.

The bankruptcy code, he asserted, cannot be the only way to clean up the banks. It is the only one element of the larger cleanup plan, he said and called for a multi-prong approach to address the challenge of NPAs in India.

India, he asserted, is capable of a strong growth. As such the seven per cent growth is now being taken granted.&nbsp;

"If we go below seven per cent, then we must be doing something wrong," he said adding that that is the base on which India has to grow at least for next 10-15 years.&nbsp;

India, he said, needs to create one million jobs a month for the people joining the labour force.

The country today is facing three major bottlenecks. One is the torn infrastructure, he said, observing that construction is the one industry that drives the economy in early stages. "Infrastructure creates growth,"&nbsp;he said.&nbsp;

Second, short term target should be to clean up the power sector and to make sure that the electricity produced actually goes to the people who want the power, he said.&nbsp;

Cleaning up the banks is the third major bottleneck in India's growth, he said.

Part of the problem in India is that there is an excessive centralisation of power in the political decision making, he said.&nbsp;

"India can't work from the centre. India works when you have many people taking up the burden. And today the central government is excessively centralised," Rajan said.&nbsp;

An example of this is the quantum of decisions that requires the ascent of the Prime Minister's Office, Rajan said as he highlighted the recent unveiling of the 'Statue of Unity' of Sardar Vallabhbhai Patel as an example of a massive project that required the approval of the PMO.&nbsp;

Demonetisation and the Goods and Services Tax (GST) are the two major headwinds that held back India's economic growth last year, former RBI Governor Raghuram Rajan has said, asserting that the current seven per cent growth rate is not enough to meet the country's needs.

Demonetisation and the Goods and Services Tax (GST) are the two major headwinds that held back India's economic growth last year, former RBI Governor Raghuram Rajan has said, asserting that the current seven per cent growth rate is not enough to meet the country's needs. Addressing an audience at the University of California in Berkley on Friday, Rajan said for four years -- 2012 to 2016 -- India was growing at a faster pace before it was hit by two major headwinds. "The two successive shocks of demonetisation and the GST had a serious impact on growth in India. Growth has fallen off interestingly at a time when growth in the global economy has been peaking up," he said delivering the second Bhattacharya Lectureship on the Future of India. Rajan said a growth rate of seven per cent per year for 25 years is "very very strong" growth, but in some sense this has become the new Hindu rate of growth, which earlier used to be three-and-a-half per cent, Rajan said. "The reality is that seven is not enough for the kind of people coming into the labour market and we need jobs for them, So, we need more and cannot be satisfied at this level," he said. Observing that India is sensitive to global growth, he said India has become a much more open economy, and if the world grows, it also grows more. "What happened in 2017 is that even as the world picked up, India went down. That reflects the fact that these blows (demonetisation and GST) have really really been hard blows...Because of these headwinds we have been held back," he said. While India's growth is picking up again, there is the issue of oil prices, the economist noted referring to the huge reliance of India on import of oil for its energy needs. With the oil prices going up, Rajan said things are going to be little tougher for the Indian economy, even though the country is recovering from the headwinds of demonetisation and initial hurdles in the implementation of the GST. Commenting on the rising Non-Performing Assets (NPA), he said the best thing to do in such a situation is to "clean up". It is essential to "deal up with the bad stuff", so that with clean balance sheets, banks can be put back on the track. "It has taken India far long to clean up the banks, partly because the system did not had instruments to deal with bad debts," Rajan said. The bankruptcy code, he asserted, cannot be the only way to clean up the banks. It is the only one element of the larger cleanup plan, he said and called for a multi-prong approach to address the challenge of NPAs in India. India, he asserted, is capable of a strong growth. As such the seven per cent growth is now being taken granted. "If we go below seven per cent, then we must be doing something wrong," he said adding that that is the base on which India has to grow at least for next 10-15 years. India, he said, needs to create one million jobs a month for the people joining the labour force. The country today is facing three major bottlenecks. One is the torn infrastructure, he said, observing that construction is the one industry that drives the economy in early stages. "Infrastructure creates growth," he said. Second, short term target should be to clean up the power sector and to make sure that the electricity produced actually goes to the people who want the power, he said. Cleaning up the banks is the third major bottleneck in India's growth, he said. Part of the problem in India is that there is an excessive centralisation of power in the political decision making, he said. "India can't work from the centre. India works when you have many people taking up the burden. And today the central government is excessively centralised," Rajan said. An example of this is the quantum of decisions that requires the ascent of the Prime Minister's Office, Rajan said as he highlighted the recent unveiling of the 'Statue of Unity' of Sardar Vallabhbhai Patel as an example of a massive project that required the approval of the PMO.

India's economic growth held back due to demonetisation, GST: Raghuram Rajan 

The rupee recovered 21 paise to 72.91 against the US dollar early Tuesday on increased selling by exporters.

The dollar's weakness against some currencies overseas and a better opening of the domestic equity market also supported the rupee, dealers said,.

At the interbank forex market, the rupee opened strong at 72.98 and advanced further to trade at 72.91, reflecting a rise of 21 paise over its previous close of 73.12 against the dollar.

On Monday, the Indian rupee tumbled 67 paise to close at 73.12 against the US dollar on increased demand for the American currency from importers and unabated foreign fund outflows.

Meanwhile, the benchmark Sensex rose 118.44 points, or 0.34 per cent, to 35,069.36 in opening trade Tuesday.&nbsp;

The rupee recovered 21 paise to 72.91 against the US dollar early Tuesday on increased selling by exporters. The dollar's weakness against some currencies overseas and a better opening of the domestic equity market also supported the rupee, dealers said,.

The rupee recovered 21 paise to 72.91 against the US dollar early Tuesday on increased selling by exporters. The dollar's weakness against some currencies overseas and a better opening of the domestic equity market also supported the rupee, dealers said,. At the interbank forex market, the rupee opened strong at 72.98 and advanced further to trade at 72.91, reflecting a rise of 21 paise over its previous close of 73.12 against the dollar. On Monday, the Indian rupee tumbled 67 paise to close at 73.12 against the US dollar on increased demand for the American currency from importers and unabated foreign fund outflows. Meanwhile, the benchmark Sensex rose 118.44 points, or 0.34 per cent, to 35,069.36 in opening trade Tuesday.

Rupee recovers 21 paise to 72.91 against US dollar

Saudi Crown Prince <a href="http://www.wionews.com/world/leading-us-senator-blames-saudi-prince-salman-for-khashoggi-death-172688">Mohammed bin Salman</a> on Monday laid the foundation stone for the kingdom's first nuclear research reactor, state media said, as the kingdom seeks to diversify its energy mix.

The reactor was among seven projects launched by the prince during a visit to Riyadh's King Abdulaziz City for Science and Technology, the official Saudi Press Agency reported.

SPA offered no details on when the research or non-power reactor -- typically used for research, development and education purposes -- would be built and at what cost.

Saudi Arabia currently draws on oil and natural gas to meet its own fast-growing power demand and desalinate its water.

The world's top crude exporter harbours plans to build 16 nuclear reactors over the next two decades for $80 billion as it seeks to diversify, despite concerns over nuclear proliferation in the Middle East.

Prince Mohammed said in March that if Iran develops a&nbsp;nuclear&nbsp;weapon, Riyadh will do so too.&nbsp;

In an interview with CBS television, he likened regional rival Iran's supreme leader to Hitler, saying he "wants to create his own project in the Middle East".

Riyadh held deep reservations over the 2015 accord aimed at curbing Iran's&nbsp;nuclear&nbsp;ambitions and hailed President Donald Trump's announcement in May that the United States was withdrawing from the deal.

Monday's announcement comes as the US vowed to be "relentless" in countering Iran as sweeping new sanctions took effect.

Saudi Crown Prince Mohammed bin Salman on Monday laid the foundation stone for the kingdom's first nuclear research reactor, state media said, as the kingdom seeks to diversify its energy mix.

Saudi Crown Prince Mohammed bin Salman on Monday laid the foundation stone for the kingdom's first nuclear research reactor, state media said, as the kingdom seeks to diversify its energy mix. The reactor was among seven projects launched by the prince during a visit to Riyadh's King Abdulaziz City for Science and Technology, the official Saudi Press Agency reported. SPA offered no details on when the research or non-power reactor -- typically used for research, development and education purposes -- would be built and at what cost. Saudi Arabia currently draws on oil and natural gas to meet its own fast-growing power demand and desalinate its water. The world's top crude exporter harbours plans to build 16 nuclear reactors over the next two decades for $80 billion as it seeks to diversify, despite concerns over nuclear proliferation in the Middle East. Prince Mohammed said in March that if Iran develops a nuclear weapon, Riyadh will do so too. In an interview with CBS television, he likened regional rival Iran's supreme leader to Hitler, saying he "wants to create his own project in the Middle East". Riyadh held deep reservations over the 2015 accord aimed at curbing Iran's nuclear ambitions and hailed President Donald Trump's announcement in May that the United States was withdrawing from the deal. Monday's announcement comes as the US vowed to be "relentless" in countering Iran as sweeping new sanctions took effect.

Saudi Arabia to build first nuclear reactor

A political crisis in Sri Lanka, where two prime ministers are fighting for power, is scaring away tourists and raising questions over foreign aid, ringing alarm bells for the economy as the currency slumps to record lows.

The turmoil in the Indian Ocean nation that has seen one premier refuse to be sacked, and another battle to prove a majority in a parliament that is banned from meeting, has caused major upheaval that Sri Lanka cannot afford.

Amidst warnings from politicians of a "bloodbath" if the dispute escalates, tourists are cancelling hotel bookings just as Sri Lankan beaches and major sites like the Temple of the Tooth prepare for peak season.

While no official figures have been given, deluxe hotels have reported cancellations and a critical decline in new bookings in the past 10 days.

"This comes at the worst possible time when people in Europe are making their holiday plans abroad," a Colombo city hotel executive told AFP. "We have had a lot of cancellations from the United States."

"With the political crisis our winter season is gone," the director of a luxury beach resort in&nbsp;the south of the island said.

Tourist dollars needed&nbsp;

Western nations have warned their citizens to be on their guard in Sri Lanka.

"You should exercise vigilance and avoid all demonstrations or large political gatherings," a British government advisory said.&nbsp;

Tourism is a cornerstone of the economy. More than 2.4 million foreign holidaymakers visited last year, spending $3.2 billion. Authorities had been counting on a rise of more than 10 per cent this year.

And whether Ranil Wickremesinghe stays in office or former president Mahinda Rajapakse takes his place, foreign earnings will be badly needed.&nbsp;

The Asian Development Bank had predicted the economy would grow by 3.8 per cent this year and 4.5 per cent in 2019, but all bets are now off.

The power vacuum has raised doubts over a US $1.5 billion Japanese-funded light rail project and another US $480 million of US finance for transport and health, a Wickremesinghe minister, Patali Ranawaka, said last week.

The International Monetary Fund (IMF) was about to announce an agreement on releasing a new tranche of a US $1.5 billion loan when President Maithripala Sirisena sacked Wickremesinghe on October 26.

"We are monitoring the situation closely and we remain in contact with our counterparts at the technical level," an IMF spokesman said of the deepening power struggle.

Populist cuts&nbsp;

Wickremesinghe, a market liberal, has insisted he is still in charge while strongman former leader Rajapakse -- already blamed for piling up the island's debt when he was president from 2005 to 2015 -- launched his rival administration last week with measures that caused new jitters.

Rajapakse, finance minister as well as head of government, reduced the price of fuel and other essential goods and cut taxes in a move to win over the public.

Treasury officials, who asked not to be named, said the revenue loss from the cuts could blow&nbsp;a new hole in the country's balance sheet.

Official figures show that Sri Lanka will have to start repaying a record US $4.2 billion of debt in 2019, up from US $2.8 billion this year.

The crisis broke just days after Finance Minister Mangala Samaraweera called for a "coalition of the willing" to stabilise the free-falling Sri Lankan rupee along with other emerging market currencies.

The rupee hit a record-low 177.32 to the dollar last week, despite official measures to arrest its decline.

The currency has shed more than 14 per cent this year and Sri Lanka fears it could slide further as US sanctions squeeze Iran, the island's chief source of oil.

Samaraweera, whose position is now disputed by Rajapakse, said the flight of foreign capital accelerated in the first four days after the political crisis.

He cited Colombo stock exchange figures showing foreign investors took out nearly US $23 million from the market, compared to $35 million over the first nine months of this year.

Rajapakse has said he will cut down on non-essential imports and reduce personal and corporate taxes to encourage local industrialists and companies.

Fitch said however that a protracted political crisis could undermine foreign investor confidence and "make it more challenging" for Colombo to pay its debts.

A political crisis in Sri Lanka, where two prime ministers are fighting for power, is scaring away tourists and raising questions over foreign aid, ringing alarm bells for the economy as the currency slumps to record lows.

A political crisis in Sri Lanka, where two prime ministers are fighting for power, is scaring away tourists and raising questions over foreign aid, ringing alarm bells for the economy as the currency slumps to record lows. The turmoil in the Indian Ocean nation that has seen one premier refuse to be sacked, and another battle to prove a majority in a parliament that is banned from meeting, has caused major upheaval that Sri Lanka cannot afford. Amidst warnings from politicians of a "bloodbath" if the dispute escalates, tourists are cancelling hotel bookings just as Sri Lankan beaches and major sites like the Temple of the Tooth prepare for peak season. While no official figures have been given, deluxe hotels have reported cancellations and a critical decline in new bookings in the past 10 days. "This comes at the worst possible time when people in Europe are making their holiday plans abroad," a Colombo city hotel executive told AFP. "We have had a lot of cancellations from the United States." "With the political crisis our winter season is gone," the director of a luxury beach resort in the south of the island said. Tourist dollars needed Western nations have warned their citizens to be on their guard in Sri Lanka. "You should exercise vigilance and avoid all demonstrations or large political gatherings," a British government advisory said. Tourism is a cornerstone of the economy. More than 2.4 million foreign holidaymakers visited last year, spending $3.2 billion. Authorities had been counting on a rise of more than 10 per cent this year. And whether Ranil Wickremesinghe stays in office or former president Mahinda Rajapakse takes his place, foreign earnings will be badly needed. The Asian Development Bank had predicted the economy would grow by 3.8 per cent this year and 4.5 per cent in 2019, but all bets are now off. The power vacuum has raised doubts over a US $1.5 billion Japanese-funded light rail project and another US $480 million of US finance for transport and health, a Wickremesinghe minister, Patali Ranawaka, said last week. The International Monetary Fund (IMF) was about to announce an agreement on releasing a new tranche of a US $1.5 billion loan when President Maithripala Sirisena sacked Wickremesinghe on October 26. "We are monitoring the situation closely and we remain in contact with our counterparts at the technical level," an IMF spokesman said of the deepening power struggle. Populist cuts Wickremesinghe, a market liberal, has insisted he is still in charge while strongman former leader Rajapakse -- already blamed for piling up the island's debt when he was president from 2005 to 2015 -- launched his rival administration last week with measures that caused new jitters. Rajapakse, finance minister as well as head of government, reduced the price of fuel and other essential goods and cut taxes in a move to win over the public. Treasury officials, who asked not to be named, said the revenue loss from the cuts could blow a new hole in the country's balance sheet. Official figures show that Sri Lanka will have to start repaying a record US $4.2 billion of debt in 2019, up from US $2.8 billion this year. The crisis broke just days after Finance Minister Mangala Samaraweera called for a "coalition of the willing" to stabilise the free-falling Sri Lankan rupee along with other emerging market currencies. The rupee hit a record-low 177.32 to the dollar last week, despite official measures to arrest its decline. The currency has shed more than 14 per cent this year and Sri Lanka fears it could slide further as US sanctions squeeze Iran, the island's chief source of oil. Samaraweera, whose position is now disputed by Rajapakse, said the flight of foreign capital accelerated in the first four days after the political crisis. He cited Colombo stock exchange figures showing foreign investors took out nearly US $23 million from the market, compared to $35 million over the first nine months of this year. Rajapakse has said he will cut down on non-essential imports and reduce personal and corporate taxes to encourage local industrialists and companies. Fitch said however that a protracted political crisis could undermine foreign investor confidence and "make it more challenging" for Colombo to pay its debts.

Sri Lanka crisis scares tourists in fresh hit to economy

Since jihadists were ousted from Mosul last year, taxi driver Abu Aref has ferried more than just people into Iraq's second city: he regularly smuggles envelopes stuffed with cash.

This is how salaries are paid and bills settled in the northern metropolis, despite the banks reopening since Iraqi forces seized it back last year from the Islamic State group after three years of jihadist rule.

Iraqi authorities, fearing that free flows of money could help finance an IS comeback, have not authorised even simple transfers.&nbsp;

So Mosul banks, exchange offices, and money transfer companies have watched helplessly as more rudimentary methods fill the gap.

Abu Aref said he typically carries anywhere between US $10,000 (8,800 euros) to US $50,000 at a time in his cab.&nbsp;

"I put the money in an envelope that I then tape underneath my seat," he told AFP.

The journey can be risky. One of his colleagues was recently the victim of a highway robbery along the 200-kilometre (120-mile) route between Mosul and Baiji, further south.&nbsp;

"Despite the risks, businessmen entrust this much money to me because they don't have another choice," the 35 year-old said.

IS swept into Mosul in 2014, seizing several hundred million dollars from a branch of Iraq's central bank and other financial institutions.&nbsp;

Mosul came back under Iraqi government control in July 2017 after a months-long assault that left its infrastructure devastated, but IS cells appear to remain active.&nbsp;

Security forces last month arrested nearly a dozen members of an IS financial network based in Iraq, according to a US-led coalition against the jihadists in Iraq and Syria.

The central bank has remained wary of resuming operations in Mosul, saying it wants to know "where this money comes from and where it's going".&nbsp;

To Baghdad and beyond&nbsp;

Around 20 private and state-owned banks have reopened in Mosul, allowing residents to open an account, deposit and withdraw money, and issue cheques.

But the central bank has not budged on its ban on transfers to and from the city.

That decision appears to have hurt business owners trying to rekindle economic activity in Mosul, a centuries-old trade hub with access to Iraqi, Turkish and Syrian markets.

Among them is Abdullah Basman, a Mosul native who sells computer parts brought in from other areas of Iraq and from Dubai.

To pay suppliers, he hands envelopes of cash to a driver he trusts, who rushes the money to Baghdad and wires it to other Iraqi cities or internationally to pay the shop's bills.&nbsp;

"The banks in Mosul are just buildings. Nothing more," said Basman, 27.&nbsp;

For company employee Abu Akram, the ban on bank transfers means he often goes months without a salary, which is issued from his firm's headquarters in Baghdad.&nbsp;

The 35-year-old relies on friends of relatives who traverse the dusty 400 kilometres (250 miles) south to Baghdad or travel to nearby Iraqi Kurdistan to retrieve his cash.&nbsp;

But there are hiccups.&nbsp;

"Sometimes, my company refuses to give my salary to someone other than me. With a taxi, there's a risk of an accident or of theft," Abu Akram told AFP.

Banks quiet, markets buzz&nbsp;

The reach of banks in Mosul appear to be par for the course in Iraq, where only one in ten people has an account, according to the World Bank.&nbsp;

"The banking system in Iraq is underdeveloped, dominated by inefficient state-owned banks. Some of them&nbsp;are believed to be capital deficient and extend little credit to the private sector," the multilateral lender wrote in a recent report.&nbsp;

"Private banks are small and they are mostly active in currency exchanges and wire transfers."&nbsp;

Despite the challenges, Iraqi economist Rafea Ahmed says multiple businesses and investors have already resumed operations in Mosul.&nbsp;

"They rapidly brought back their money in their own ways," he said.

Secret transfers even continued during IS's rule over the city, with family members living in Baghdad finding ways to smuggle money to relatives stuck inside Mosul.&nbsp;

Some of that cash, says Ahmed, has contributed to the revival already visible in Mosul.&nbsp;

Even if the banks sit empty, the restaurants, commercial centres, and open markets are now buzzing with activity.&nbsp;

Since jihadists were ousted from Mosul last year, taxi driver Abu Aref has ferried more than just people into Iraq's second city: he regularly smuggles envelopes stuffed with cash.

Since jihadists were ousted from Mosul last year, taxi driver Abu Aref has ferried more than just people into Iraq's second city: he regularly smuggles envelopes stuffed with cash. This is how salaries are paid and bills settled in the northern metropolis, despite the banks reopening since Iraqi forces seized it back last year from the Islamic State group after three years of jihadist rule. Iraqi authorities, fearing that free flows of money could help finance an IS comeback, have not authorised even simple transfers. So Mosul banks, exchange offices, and money transfer companies have watched helplessly as more rudimentary methods fill the gap. Abu Aref said he typically carries anywhere between US $10,000 (8,800 euros) to US $50,000 at a time in his cab. "I put the money in an envelope that I then tape underneath my seat," he told AFP. The journey can be risky. One of his colleagues was recently the victim of a highway robbery along the 200-kilometre (120-mile) route between Mosul and Baiji, further south. "Despite the risks, businessmen entrust this much money to me because they don't have another choice," the 35 year-old said. IS swept into Mosul in 2014, seizing several hundred million dollars from a branch of Iraq's central bank and other financial institutions. Mosul came back under Iraqi government control in July 2017 after a months-long assault that left its infrastructure devastated, but IS cells appear to remain active. Security forces last month arrested nearly a dozen members of an IS financial network based in Iraq, according to a US-led coalition against the jihadists in Iraq and Syria. The central bank has remained wary of resuming operations in Mosul, saying it wants to know "where this money comes from and where it's going". To Baghdad and beyond Around 20 private and state-owned banks have reopened in Mosul, allowing residents to open an account, deposit and withdraw money, and issue cheques. But the central bank has not budged on its ban on transfers to and from the city. That decision appears to have hurt business owners trying to rekindle economic activity in Mosul, a centuries-old trade hub with access to Iraqi, Turkish and Syrian markets. Among them is Abdullah Basman, a Mosul native who sells computer parts brought in from other areas of Iraq and from Dubai. To pay suppliers, he hands envelopes of cash to a driver he trusts, who rushes the money to Baghdad and wires it to other Iraqi cities or internationally to pay the shop's bills. "The banks in Mosul are just buildings. Nothing more," said Basman, 27. For company employee Abu Akram, the ban on bank transfers means he often goes months without a salary, which is issued from his firm's headquarters in Baghdad. The 35-year-old relies on friends of relatives who traverse the dusty 400 kilometres (250 miles) south to Baghdad or travel to nearby Iraqi Kurdistan to retrieve his cash. But there are hiccups. "Sometimes, my company refuses to give my salary to someone other than me. With a taxi, there's a risk of an accident or of theft," Abu Akram told AFP. Banks quiet, markets buzz The reach of banks in Mosul appear to be par for the course in Iraq, where only one in ten people has an account, according to the World Bank. "The banking system in Iraq is underdeveloped, dominated by inefficient state-owned banks. Some of them are believed to be capital deficient and extend little credit to the private sector," the multilateral lender wrote in a recent report. "Private banks are small and they are mostly active in currency exchanges and wire transfers." Despite the challenges, Iraqi economist Rafea Ahmed says multiple businesses and investors have already resumed operations in Mosul. "They rapidly brought back their money in their own ways," he said. Secret transfers even continued during IS's rule over the city, with family members living in Baghdad finding ways to smuggle money to relatives stuck inside Mosul. Some of that cash, says Ahmed, has contributed to the revival already visible in Mosul. Even if the banks sit empty, the restaurants, commercial centres, and open markets are now buzzing with activity.

Money moves again in Iraq's Mosul, but not via banks

The Federal Reserve Bank of Kansas City organises the annual Jackson Hole Economic Policy Symposium in the Grand Tetons National Park, Wyoming, USA. The Symposium, held from August 23-25 this year, witnesses a number of prominent economists, central bankers and policymakers coming together to discuss pressing and dynamic economic issues. Given the presence of renowned economists and policymakers, it is no surprise that the Symposium commands considerable interest among the media, economists and central bankers.

This year, the Symposium sought to discuss issues surrounding market power and concentration and how it is shaping the discourse around unemployment, inflation and the role of the central bank in monetary policy. In the last few years, especially in the United States, firm concentration has increased. That is, there are a small number of extremely successful but large firms that dominate the entire market, while the smaller firms either consolidate into another large firm or are integrated into the value chains of the existing large firms. The rise of Internet and tech-based superstar firms like Google, Amazon, Apple and Facebook are a case in point. At the same time, although unemployment rates in the US are at historically low levels after the financial crisis of 2008, wage growth and inflation have been very sluggish. This upsets the traditional unemployment-inflation trade-off — called the Phillips Curve — used by central banks to determine the level of intervention in the money markets.

According to economists, rising concentration might be driving low wage and price growth. The large firms act as a monopsony — or, a single buyer — in the labour market. As the single employer in a particular market, they are able to hold wages down. In the absence of an alternative firm, workers are bound to the superstar firm and forced to accept lower or stagnant wages. Alan Krueger, a Princeton economist, argued further that some of these firms also collude, either explicitly or through more subtle signalling to bid wages down and restrict workers from switching firms.

Another paper by Alberto Cavallo of Harvard University found evidence that the algorithms used by internet-based retail giants like Amazon to constantly change and adjust prices have led to greater price fluctuations in response to various macroeconomic shocks. This so-called 'Amazon Effect' not only forces brick-and-mortar outlets to respond in a similar manner but also reduces the ability of the central bank to influence prices in the economy. This, therefore, calls into question the traditional tools available to central banks, such as the interest rate, in conducting monetary policy.

As far as India is concerned, the Amazon Effect is unlikely to be significant as e-commerce penetration is still relatively low and a large part of price fluctuations is primarily due to supply shocks arising from agriculture and crude oil imports. However, increasing firm concentration and consequent rise in market power is a cause for concern even in India as rising wages and job opportunities are absolutely essential for India to realise its demographic dividend. While the government embarks on its flagship 'Make in India' programme to generate new jobs, there is also an urgent need to ensure that large firms are not able to exercise undue influence on the job market. 
&nbsp;

(This article was originally published on DNA. Read the<a href="https://www.dnaindia.com/analysis/column-the-amazon-effects-and-monopsony-2677403"> original article)</a>

(Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)

&nbsp;

The Federal Reserve Bank of Kansas City organises the annual Jackson Hole Economic Policy Symposium in the Grand Tetons National Park, Wyoming, USA. The Symposium, held from August 23-25 this year, witnesses a number of prominent economists, central bankers and policymakers coming together to discuss pressing and dynamic economic issues.

The Federal Reserve Bank of Kansas City organises the annual Jackson Hole Economic Policy Symposium in the Grand Tetons National Park, Wyoming, USA. The Symposium, held from August 23-25 this year, witnesses a number of prominent economists, central bankers and policymakers coming together to discuss pressing and dynamic economic issues. Given the presence of renowned economists and policymakers, it is no surprise that the Symposium commands considerable interest among the media, economists and central bankers. This year, the Symposium sought to discuss issues surrounding market power and concentration and how it is shaping the discourse around unemployment, inflation and the role of the central bank in monetary policy. In the last few years, especially in the United States, firm concentration has increased. That is, there are a small number of extremely successful but large firms that dominate the entire market, while the smaller firms either consolidate into another large firm or are integrated into the value chains of the existing large firms. The rise of Internet and tech-based superstar firms like Google, Amazon, Apple and Facebook are a case in point. At the same time, although unemployment rates in the US are at historically low levels after the financial crisis of 2008, wage growth and inflation have been very sluggish. This upsets the traditional unemployment-inflation trade-off — called the Phillips Curve — used by central banks to determine the level of intervention in the money markets. According to economists, rising concentration might be driving low wage and price growth. The large firms act as a monopsony — or, a single buyer — in the labour market. As the single employer in a particular market, they are able to hold wages down. In the absence of an alternative firm, workers are bound to the superstar firm and forced to accept lower or stagnant wages. Alan Krueger, a Princeton economist, argued further that some of these firms also collude, either explicitly or through more subtle signalling to bid wages down and restrict workers from switching firms. Another paper by Alberto Cavallo of Harvard University found evidence that the algorithms used by internet-based retail giants like Amazon to constantly change and adjust prices have led to greater price fluctuations in response to various macroeconomic shocks. This so-called 'Amazon Effect' not only forces brick-and-mortar outlets to respond in a similar manner but also reduces the ability of the central bank to influence prices in the economy. This, therefore, calls into question the traditional tools available to central banks, such as the interest rate, in conducting monetary policy. As far as India is concerned, the Amazon Effect is unlikely to be significant as e-commerce penetration is still relatively low and a large part of price fluctuations is primarily due to supply shocks arising from agriculture and crude oil imports. However, increasing firm concentration and consequent rise in market power is a cause for concern even in India as rising wages and job opportunities are absolutely essential for India to realise its demographic dividend. While the government embarks on its flagship 'Make in India' programme to generate new jobs, there is also an urgent need to ensure that large firms are not able to exercise undue influence on the job market. (This article was originally published on DNA. Read the original article) (Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)

The Amazon effects and monopsony

US&nbsp;President Donald Trump heaped more criticism on the Federal Reserve in an interview with Fox Business Network on Tuesday, extending his discontent beyond its chairman, Jerome Powell, whom he has frequently critiqued in public.

"My biggest threat is the Fed," he said, according to excerpts released before the interview with "Trish Regan Primetime" airs. "I put a couple of other people there I’m not so happy with too but for the most part I’m very happy with people."

Last week, Trump criticized the US&nbsp;central bank twice, saying it was raising interest rates so swiftly that it threatened the country's economic health.

Nonetheless, in the face of a hot labour market and signs of inflation, the Fed has settled into a gradual policy tightening and is expected to raise interest rates again in December.

Past US&nbsp;presidents have been reticent to criticize the central bank because its independence is seen as important for economic stability. But Trump in the past week has called the Fed "crazy," "loco," "ridiculous," and "too cute."

Trump has said he is not trying to oust Powell, whom he appointed to replace former Chair Janet Yellen. The president also appointed two of the three other policymakers on the Fed's powerful Board of Governors, Randal Quarles and Richard Clarida.

"Can I be honest? I’m not blaming anybody," Trump said in the interview. "I put (Powell) there. And maybe it’s right, maybe it’s wrong, but I put him there."

The Fed independently makes policy decisions but regularly reports to Congress. Data since the Fed's last meeting in September has been in line with its portrait of a strong economy, and policymakers have said they expect to continue a rate-hike cycle that began in late 2015.

Republican US&nbsp;Representative Jeb Hensarling, who is set to retire as chairman of the House of Representatives Financial Services Committee that oversees the central bank, said Trump "clearly has his own style." But "I don't think the fact that he has publicly criticized the Fed, in any way shape or form, is going to impinge upon (its) independence," he told Reuters.

US President Donald Trump heaped more criticism on the Federal Reserve in an interview with Fox Business Network on Tuesday, extending his discontent beyond its chairman, Jerome Powell, whom he has frequently critiqued in public.

US President Donald Trump heaped more criticism on the Federal Reserve in an interview with Fox Business Network on Tuesday, extending his discontent beyond its chairman, Jerome Powell, whom he has frequently critiqued in public. "My biggest threat is the Fed," he said, according to excerpts released before the interview with "Trish Regan Primetime" airs. "I put a couple of other people there I’m not so happy with too but for the most part I’m very happy with people." Last week, Trump criticized the US central bank twice, saying it was raising interest rates so swiftly that it threatened the country's economic health. Nonetheless, in the face of a hot labour market and signs of inflation, the Fed has settled into a gradual policy tightening and is expected to raise interest rates again in December. Past US presidents have been reticent to criticize the central bank because its independence is seen as important for economic stability. But Trump in the past week has called the Fed "crazy," "loco," "ridiculous," and "too cute." Trump has said he is not trying to oust Powell, whom he appointed to replace former Chair Janet Yellen. The president also appointed two of the three other policymakers on the Fed's powerful Board of Governors, Randal Quarles and Richard Clarida. "Can I be honest? I’m not blaming anybody," Trump said in the interview. "I put (Powell) there. And maybe it’s right, maybe it’s wrong, but I put him there." The Fed independently makes policy decisions but regularly reports to Congress. Data since the Fed's last meeting in September has been in line with its portrait of a strong economy, and policymakers have said they expect to continue a rate-hike cycle that began in late 2015. Republican US Representative Jeb Hensarling, who is set to retire as chairman of the House of Representatives Financial Services Committee that oversees the central bank, said Trump "clearly has his own style." But "I don't think the fact that he has publicly criticized the Fed, in any way shape or form, is going to impinge upon (its) independence," he told Reuters.

Trump widens Fed critique, calls it 'my biggest threat'

Finance Minister Arun Jaitley Tuesday said India needs a strong and decisive leadership at the Centre to continue its high growth path and take swift decisions.

Outlining the challenges for India, Jaitley said being a net buyer of oil, a rise in global crude prices adversely impacts the country and hence the economy has to be resilient to deal with it.

"If this path of high growth trajectory is to continue...If this higher growth, higher revenues and higher resources have to continue, better infrastructure objective has to be achieved, India needs a strong and decisive leadership at the Centre.&nbsp;

"A weak leadership, within days of a crisis, could not have handled IL&amp;FS the way the present government did, and therefore a crisis in the making was handled with swiftness," Jaitley said in his address to the AGM of industry chamber Assocham.

Debt-ridden IL&amp;FS and its group companies have defaulted on loan repayments, following which the government superseded its Board by appointing eminent banker Uday Kotak as its Chairman.

Talking about the political challenges facing the country, Jaitley said these are thrown up by unstable coalition and aspiring politicians, who want to acquire the top place.

"Therefore, today what India needs is not individuals with lack of understanding of policies, lack of understanding of directions or inherently unstable coalition, but a government and leadership with absolute clarity about the direction so that this unique position which IMF refers to as a sweet spot in the world, this sweet spot we continue to occupy for the next two decades," he said.

Jaitley said if India continues on a high growth path, then the country can get rid of poverty and can become a developed country.

"You need a decisive government, you need a government which has a coherent policy and is absolutely clear in the direction you have to move, and you need a government which is not dependent on those who would try to pull the government down by their strategies," Jaitley said in his video conference address.

The Indian economy grew at 8.2 per cent in the April-June quarter of current fiscal. It grew at 6.7 per cent in 2017-18 fiscal.&nbsp;

Stating that domestic policies of certain countries have spillover effects on India, Jaitley hoped that such effects will not be everlasting and are transient in character.

"As a fast-growing economy we have the capacity to face these challenges," he said.&nbsp;

Jaitley said global oil prices have risen on account of "artificial shortages" and it has adversely impacted India. India imports 83 per cent of its oil needs.

"Therefore we have to face that challenge by making our economy so resilient itself that we have the capacity to bear that challenge," he added.&nbsp;

Finance Minister Arun Jaitley Tuesday said India needs a strong and decisive leadership at the Centre to continue its high growth path and take swift decisions. Outlining the challenges for India, Jaitley said being a net buyer of oil, a rise in global crude prices adversely impacts the country and hence the economy has to be resilient to deal with it.

Finance Minister Arun Jaitley Tuesday said India needs a strong and decisive leadership at the Centre to continue its high growth path and take swift decisions. Outlining the challenges for India, Jaitley said being a net buyer of oil, a rise in global crude prices adversely impacts the country and hence the economy has to be resilient to deal with it. "If this path of high growth trajectory is to continue...If this higher growth, higher revenues and higher resources have to continue, better infrastructure objective has to be achieved, India needs a strong and decisive leadership at the Centre. "A weak leadership, within days of a crisis, could not have handled IL&FS the way the present government did, and therefore a crisis in the making was handled with swiftness," Jaitley said in his address to the AGM of industry chamber Assocham. Debt-ridden IL&FS and its group companies have defaulted on loan repayments, following which the government superseded its Board by appointing eminent banker Uday Kotak as its Chairman. Talking about the political challenges facing the country, Jaitley said these are thrown up by unstable coalition and aspiring politicians, who want to acquire the top place. "Therefore, today what India needs is not individuals with lack of understanding of policies, lack of understanding of directions or inherently unstable coalition, but a government and leadership with absolute clarity about the direction so that this unique position which IMF refers to as a sweet spot in the world, this sweet spot we continue to occupy for the next two decades," he said. Jaitley said if India continues on a high growth path, then the country can get rid of poverty and can become a developed country. "You need a decisive government, you need a government which has a coherent policy and is absolutely clear in the direction you have to move, and you need a government which is not dependent on those who would try to pull the government down by their strategies," Jaitley said in his video conference address. The Indian economy grew at 8.2 per cent in the April-June quarter of current fiscal. It grew at 6.7 per cent in 2017-18 fiscal. Stating that domestic policies of certain countries have spillover effects on India, Jaitley hoped that such effects will not be everlasting and are transient in character. "As a fast-growing economy we have the capacity to face these challenges," he said. Jaitley said global oil prices have risen on account of "artificial shortages" and it has adversely impacted India. India imports 83 per cent of its oil needs. "Therefore we have to face that challenge by making our economy so resilient itself that we have the capacity to bear that challenge," he added.

India needs strong, decisive government to take swift decision, maintain high growth: Jaitley

Indian markets on Thursday opened in red with BSE Sensex tumbling over 900 in morning trade. Shortly after opening, Sensex tumbled around 1000 points, trading at 33,918.29 at 9.30am.

Nifty, on the other hand, dipped by 290.3 points at 10,169.80 in opening trade today.&nbsp;

Indian rupee hit&nbsp;a new low of 74.47 versus the US dollar.&nbsp;

Indian equities ended more than 1 per cent higher on Wednesday with shares of non-banking financial companies staging a recovery, while IT stocks closed lower as the rupee strengthened against the US dollar.

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The benchmark BSE Sensex closed up 1.35 per cent at 34,760.89.

The broader NSE Nifty ended 1.54 per cent higher at 10,460.10.

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Meanwhile, Asian share markets sank in a sea of red on Thursday after Wall Street suffered its worst drubbing in eight months, a conflagration of wealth that could threaten business confidence and investment across the globe, news agency Reuters reported.&nbsp;

Japan's Nikkei fell 3.4 per cent, the steepest daily drop since March, while the broader TOPIX lost around $195 billion in market value.

Shanghai shares touched their lowest since late 2014, while China blue chips slid 3 per cent.

On Wall Street, the S&amp;P500's sharpest one-day fall since February wiped out around $850 billion of wealth as technology shares tumbled on fears of slowing demand.

Oil prices skidded in line with US equity markets, even though energy traders worried about shrinking Iranian supply from US sanctions and kept an eye on Hurricane Michael, which closed some US Gulf of Mexico oil output.

Brent crude fell 76 cents to $82.33 a barrel, while US crude dropped 68 cents to $72.49.

(With inputs from Reuters)&nbsp; 
&nbsp;

Indian markets on Thursday opened in red with BSE Sensex tumbling over 900 in morning trade. Shortly after opening, Sensex tumbled around 1000 points, trading at 33,918.

Indian markets on Thursday opened in red with BSE Sensex tumbling over 900 in morning trade. Shortly after opening, Sensex tumbled around 1000 points, trading at 33,918.29 at 9.30am. Nifty, on the other hand, dipped by 290.3 points at 10,169.80 in opening trade today. Indian rupee hit a new low of 74.47 versus the US dollar. Indian equities ended more than 1 per cent higher on Wednesday with shares of non-banking financial companies staging a recovery, while IT stocks closed lower as the rupee strengthened against the US dollar. Sensex opens with a fall of more than 980 points, currently at 33,774.89 pic.twitter.com/8s8goaeKAb — ANI (@ANI) October 11, 2018 × The benchmark BSE Sensex closed up 1.35 per cent at 34,760.89. The broader NSE Nifty ended 1.54 per cent higher at 10,460.10. Indian Rupee hits a new low of 74.47 versus the US Dollar pic.twitter.com/zSnUsJqPaQ — ANI (@ANI) October 11, 2018 × Meanwhile, Asian share markets sank in a sea of red on Thursday after Wall Street suffered its worst drubbing in eight months, a conflagration of wealth that could threaten business confidence and investment across the globe, news agency Reuters reported. Japan's Nikkei fell 3.4 per cent, the steepest daily drop since March, while the broader TOPIX lost around $195 billion in market value. Shanghai shares touched their lowest since late 2014, while China blue chips slid 3 per cent. On Wall Street, the S&P500's sharpest one-day fall since February wiped out around $850 billion of wealth as technology shares tumbled on fears of slowing demand. Oil prices skidded in line with US equity markets, even though energy traders worried about shrinking Iranian supply from US sanctions and kept an eye on Hurricane Michael, which closed some US Gulf of Mexico oil output. Brent crude fell 76 cents to $82.33 a barrel, while US crude dropped 68 cents to $72.49. (With inputs from Reuters)

Sensex slumps 1000 points in morning trade, Rupee hits new low of 74.47

India's battered rupee is expected to stay that way for a while, trading near recent record lows over the coming year even as the Reserve Bank of India is forecast to raise rates in December and once more in 2019, Reuters polling found.

The rupee has hit repeated record lows against the dollar this year in its worst run since the financial crisis. It is down over 16 per cent so far this year, tracking a deep selloff in emerging markets driven by a resurgent dollar and the ongoing US-China trade war.

While just two weeks ago a majority of economists polled by Reuters predicted the Reserve Bank of India (RBI) would hike interest rates on Oct 5, the central bank surprised by keeping its policy unchanged and said it was not targeting any currency level.

After that decision, the rupee fell to a record low of 74.25 against the dollar. On Tuesday, the partially convertible Indian currency hit a fresh low of 74.395 per dollar.

"We believe the RBI is underestimating the inflationary pressure in the Indian economy and the impact of ongoing Fed tightening," said Hugo Erken, senior economist at Rabobank, referring to a series of US&nbsp;Federal Reserve rate rises expected in the coming year.

Inflation in India was forecast to be a touch above the central bank's comfort level of around 4 per cent in the third quarter and the current one.

But India's widening current account deficit, thanks to rising oil prices and a weak rupee, combined with below-normal rainfall this year could translate into rising price pressures over the near term.

While economists were evenly split on the question of whether a rate hike was required to stop the rupee from falling further, the RBI is still expected to deliver in December. It is also forecast to follow that hike in the third quarter of next year, taking the repo rate to 7 per cent.

That suggests economists have pushed their expectations for the rate hike they had previously pencilled in for October to the next meeting, the last one scheduled for this year.

"Even as most (on the Monetary Policy Committee) voted to change the stance to 'calibrated tightening,' there was an evident lack of action on their part despite time running out to stop the rupee's worst fall in last five years," noted Prakash Sakpal, Asia economist at ING.

Still, 26 of 47 economists who answered an additional question said the RBI was right to keep policy on hold this month.

Predictions for one aggressive 50 basis point rate hike by end-2018 dropped sharply in the latest survey, with only one respondent now expecting such a move compared to 17 in the previous poll on September 25.

"We continue to look for the USDINR to head towards 75.0, factoring in our view of at least four rate hikes by the US&nbsp;Federal Reserve over the year, which will be dollar and rates positive," noted Radhika Rao, economist at DBS Group Research.

The latest Reuters poll of over 50 currency strategists taken Oct. 5-9 showed the rupee was seen trading around the current rate, about 74 per dollar, in three months and strengthening just a bit to around 73 per dollar in a year.

The weakest forecast across was 78.0 while the strongest rupee outlook was 67.97 compared to 75.6 and 66.1, respectively, in the previous month poll.

But in a year, the rupee's expected performance is broadly in line with expectations for most currencies as the dollar's resurgence is predicted to fade.

A majority, 27 of 48 analysts, said the risks were skewed more towards the rupee strengthening against the greenback over the next year. 
&nbsp;

India's battered rupee is expected to stay that way for a while, trading near recent record lows over the coming year even as the Reserve Bank of India is forecast to raise rates in December and once more in 2019, Reuters polling found.

India's battered rupee is expected to stay that way for a while, trading near recent record lows over the coming year even as the Reserve Bank of India is forecast to raise rates in December and once more in 2019, Reuters polling found. The rupee has hit repeated record lows against the dollar this year in its worst run since the financial crisis. It is down over 16 per cent so far this year, tracking a deep selloff in emerging markets driven by a resurgent dollar and the ongoing US-China trade war. While just two weeks ago a majority of economists polled by Reuters predicted the Reserve Bank of India (RBI) would hike interest rates on Oct 5, the central bank surprised by keeping its policy unchanged and said it was not targeting any currency level. After that decision, the rupee fell to a record low of 74.25 against the dollar. On Tuesday, the partially convertible Indian currency hit a fresh low of 74.395 per dollar. "We believe the RBI is underestimating the inflationary pressure in the Indian economy and the impact of ongoing Fed tightening," said Hugo Erken, senior economist at Rabobank, referring to a series of US Federal Reserve rate rises expected in the coming year. Inflation in India was forecast to be a touch above the central bank's comfort level of around 4 per cent in the third quarter and the current one. But India's widening current account deficit, thanks to rising oil prices and a weak rupee, combined with below-normal rainfall this year could translate into rising price pressures over the near term. While economists were evenly split on the question of whether a rate hike was required to stop the rupee from falling further, the RBI is still expected to deliver in December. It is also forecast to follow that hike in the third quarter of next year, taking the repo rate to 7 per cent. That suggests economists have pushed their expectations for the rate hike they had previously pencilled in for October to the next meeting, the last one scheduled for this year. "Even as most (on the Monetary Policy Committee) voted to change the stance to 'calibrated tightening,' there was an evident lack of action on their part despite time running out to stop the rupee's worst fall in last five years," noted Prakash Sakpal, Asia economist at ING. Still, 26 of 47 economists who answered an additional question said the RBI was right to keep policy on hold this month. Predictions for one aggressive 50 basis point rate hike by end-2018 dropped sharply in the latest survey, with only one respondent now expecting such a move compared to 17 in the previous poll on September 25. "We continue to look for the USDINR to head towards 75.0, factoring in our view of at least four rate hikes by the US Federal Reserve over the year, which will be dollar and rates positive," noted Radhika Rao, economist at DBS Group Research. The latest Reuters poll of over 50 currency strategists taken Oct. 5-9 showed the rupee was seen trading around the current rate, about 74 per dollar, in three months and strengthening just a bit to around 73 per dollar in a year. The weakest forecast across was 78.0 while the strongest rupee outlook was 67.97 compared to 75.6 and 66.1, respectively, in the previous month poll. But in a year, the rupee's expected performance is broadly in line with expectations for most currencies as the dollar's resurgence is predicted to fade. A majority, 27 of 48 analysts, said the risks were skewed more towards the rupee strengthening against the greenback over the next year.

No rebound for India's reeling rupee seen likely in coming year: Poll

The battered rupee rose 23 paise to 74.16 against the US dollar Wednesday after the American currency weakened overseas amid increased selling by exporters.&nbsp;&nbsp; &nbsp;

Besides, RBI's decision to inject Rs 12,000 crore liquidity into the system through the purchase of government bonds on October 11 to meet the festival season demand for funds also supported the recovery in rupee, dealers said.

A higher opening of domestic equity markets too aided the recovery in the domestic unit.

The benchmark BSE Sensex rose 110.20 points or 0.31 per cent, to 34,409.67 in opening trade.

At the forex market, the rupee strengthened by 23 paise to quote at 74.16 against the US dollar in early trade on fresh selling of the American currency by banks and exporters.

The rupee slumped by 33 paise to finish at a fresh lifetime low of 74.39 against the US dollar Tuesday on high crude oil prices, strengthening of the greenback and unabated foreign fund outflows.

Meanwhile, DIIs bought shares worth Rs 1,526 crore, while FIIs pulled out a net Rs 1,242 crore Tuesday, as per provisional stock exchange data.

The battered rupee rose 23 paise to 74.16 against the US dollar Wednesday after the American currency weakened overseas amid increased selling by exporters. Besides, RBI's decision to inject Rs 12,000 crore liquidity into the system through the purchase of government bonds on October 11 to meet the festival season demand for funds also supported the recovery in rupee, dealers said.

The battered rupee rose 23 paise to 74.16 against the US dollar Wednesday after the American currency weakened overseas amid increased selling by exporters. Besides, RBI's decision to inject Rs 12,000 crore liquidity into the system through the purchase of government bonds on October 11 to meet the festival season demand for funds also supported the recovery in rupee, dealers said. A higher opening of domestic equity markets too aided the recovery in the domestic unit. The benchmark BSE Sensex rose 110.20 points or 0.31 per cent, to 34,409.67 in opening trade. At the forex market, the rupee strengthened by 23 paise to quote at 74.16 against the US dollar in early trade on fresh selling of the American currency by banks and exporters. The rupee slumped by 33 paise to finish at a fresh lifetime low of 74.39 against the US dollar Tuesday on high crude oil prices, strengthening of the greenback and unabated foreign fund outflows. Meanwhile, DIIs bought shares worth Rs 1,526 crore, while FIIs pulled out a net Rs 1,242 crore Tuesday, as per provisional stock exchange data.

Rupee rises from record low, recovers 23 paise against US dollar

Countries having more comfortable balance sheets have more space to respond to adverse developments in the economy, a top official of the International Monetary Fund (IMF) said Wednesday, urging nations to manage assets better.

"Countries that have a more comfortable balance sheet, have a stronger net worth position, have more space to respond to adverse developments in the economy or in the financial sector. So for example, the recession's associated with a financial crisis will be a shell lower and shorter-lived," Vitor Gasper, IMF Director of Fiscal Affairs Department, told PTI in an interview.

As such, he called for better asset management by countries, including India, information for which he said was not complete.&nbsp;

"When a government has a stronger asset management, it may be able to get three per cent of GDP in additional revenue and that's about the size of the corporate income tax revenue in average in advanced economies," Gasper said underscoring the importance of asset management.

The latest Fiscal Monitor report of the IMF says public sector assets of 31 countries, including India, are worth USD 101 trillion or 219 per cent of the GDP. At the same time, liabilities amount to 198 per cent of the GDP. These 31 countries account for 61 per cent of the world GDP. Public sector balance sheets provide the most comprehensive picture of public wealth, the report said.

Calling for a better asset management, Gasper said a country could get a considerable return out of a more professional and systematic management of public sector assets.

The assets of these 31 sample countries, he said, are very diverse. They include financial assets, state-owned companies like electricity and water supply. Natural resource wealth controlled by the public sector is important in several countries, especially in those that are rich in these resources. "Assets matter because of their sheer magnitude," he said.

Noting that liabilities amount to 198 per cent of the GDP, he said slightly less than half of this value i.e., 94 per cent of GDP corresponds to the most traditional concept of gross public debt of the general government.

Of the remainder, the most important item on the liability side is already accrued public sector pension liabilities at 46 per cent of GDP. And that corresponds to responsibilities that the public sector has already formed against the public sector's own employees.&nbsp;

"So, assets matter because of their size and once you have a list of assets and the control of the public sector, you have a substantial improvement in transparency and accountability..." Gasper said, arguing that balance sheet information complements the analysis that one gets from other conventional ways of looking at fiscal policy.

India, he said, is different from other countries in the sample in the sense that the IMF's information on the public sector of India is not comprehensive. "For India, we only have information on the central government and public sector corporations that depend on the central government," he said.&nbsp;

It's not a comprehensive picture of the public sector of India because subnational finances in India are very important and the subnational levels are quite active in many areas which are crucial for the Indian economy and finance, he noted.

"So, if we use the information we have on the central government and the public corporations that depend on the Indian central government and compare it with the other countries, India is almost exactly at the middle of the distribution, with a net worth which is slightly positive and a financial net worth which is negative," Gasper said.&nbsp;

"Assets and liabilities of the central government in India are considerable and as we have seen for the aggregate numbers, liabilities go well beyond government debt only, and assets are quite considerable," he added. Natural resources constitute a non-negligible part of the public wealth of India.&nbsp;

For 2016, the public sector, mineral and energy resources are estimated at 40.5 per cent of GDP, of which 3.6 per cent is oil and gas, about 25 per cent is coal and metals, and minerals is almost 12 per cent of GDP. So this is the composition. "If you would compare, India with natural resource-rich countries, you would see that India again would be more or less in the middle of a list of countries," he said.&nbsp;

The Russian Federation has a natural resource wealth which is estimated to be more than 300 per cent of GDP, Kazakhstan has more than 200 per cent, Peru at around 170 per cent and then, down from there. "But, India is in the middle of the distribution," he added.&nbsp;

Countries having more comfortable balance sheets have more space to respond to adverse developments in the economy, a top official of the International Monetary Fund (IMF) said Wednesday, urging nations to manage assets better.

Countries having more comfortable balance sheets have more space to respond to adverse developments in the economy, a top official of the International Monetary Fund (IMF) said Wednesday, urging nations to manage assets better. "Countries that have a more comfortable balance sheet, have a stronger net worth position, have more space to respond to adverse developments in the economy or in the financial sector. So for example, the recession's associated with a financial crisis will be a shell lower and shorter-lived," Vitor Gasper, IMF Director of Fiscal Affairs Department, told PTI in an interview. As such, he called for better asset management by countries, including India, information for which he said was not complete. "When a government has a stronger asset management, it may be able to get three per cent of GDP in additional revenue and that's about the size of the corporate income tax revenue in average in advanced economies," Gasper said underscoring the importance of asset management. The latest Fiscal Monitor report of the IMF says public sector assets of 31 countries, including India, are worth USD 101 trillion or 219 per cent of the GDP. At the same time, liabilities amount to 198 per cent of the GDP. These 31 countries account for 61 per cent of the world GDP. Public sector balance sheets provide the most comprehensive picture of public wealth, the report said. Calling for a better asset management, Gasper said a country could get a considerable return out of a more professional and systematic management of public sector assets. The assets of these 31 sample countries, he said, are very diverse. They include financial assets, state-owned companies like electricity and water supply. Natural resource wealth controlled by the public sector is important in several countries, especially in those that are rich in these resources. "Assets matter because of their sheer magnitude," he said. Noting that liabilities amount to 198 per cent of the GDP, he said slightly less than half of this value i.e., 94 per cent of GDP corresponds to the most traditional concept of gross public debt of the general government. Of the remainder, the most important item on the liability side is already accrued public sector pension liabilities at 46 per cent of GDP. And that corresponds to responsibilities that the public sector has already formed against the public sector's own employees. "So, assets matter because of their size and once you have a list of assets and the control of the public sector, you have a substantial improvement in transparency and accountability..." Gasper said, arguing that balance sheet information complements the analysis that one gets from other conventional ways of looking at fiscal policy. India, he said, is different from other countries in the sample in the sense that the IMF's information on the public sector of India is not comprehensive. "For India, we only have information on the central government and public sector corporations that depend on the central government," he said. It's not a comprehensive picture of the public sector of India because subnational finances in India are very important and the subnational levels are quite active in many areas which are crucial for the Indian economy and finance, he noted. "So, if we use the information we have on the central government and the public corporations that depend on the Indian central government and compare it with the other countries, India is almost exactly at the middle of the distribution, with a net worth which is slightly positive and a financial net worth which is negative," Gasper said. "Assets and liabilities of the central government in India are considerable and as we have seen for the aggregate numbers, liabilities go well beyond government debt only, and assets are quite considerable," he added. Natural resources constitute a non-negligible part of the public wealth of India. For 2016, the public sector, mineral and energy resources are estimated at 40.5 per cent of GDP, of which 3.6 per cent is oil and gas, about 25 per cent is coal and metals, and minerals is almost 12 per cent of GDP. So this is the composition. "If you would compare, India with natural resource-rich countries, you would see that India again would be more or less in the middle of a list of countries," he said. The Russian Federation has a natural resource wealth which is estimated to be more than 300 per cent of GDP, Kazakhstan has more than 200 per cent, Peru at around 170 per cent and then, down from there. "But, India is in the middle of the distribution," he added.

India needs better asset management: Top IMF official

India's debt is lower than the best or emerging market economies in the world, a top IMF official has said as he cautioned that the global debt has reached a new record high of USD 182 trillion in 2017.

Vitor Gasper, International Monetary Fund (IMF) Director of Fiscal Affairs Department, said India's debt was substantially less than the global debt as percentage of world Gross Domestic Product (GDP).

In India, private debt in 2017 was 54.5 per cent of the GDP and the general government debt was 70.4 per cent of the GDP, a total debt of about 125 of the GDP, according to the latest IMF figures. In comparison, the debt of China was 247 per cent of the GDP.

"So, it (India's debt) is substantially less than the global debt as the percentage of world GDP," Gasper told PTI.

India's debt is below the average of advanced economies and below the average of emerging market economies, he said.

"There is a positive relationship between the debt to GDP ratio and the level of GDP per capita. If you compare around the world with the best economies or emerging market economies, the level of debt in India is lower," the top IMF official said.

The IMF is very much stressing that global debt at USD 182 trillion in 2017 is at a new record high, he said.

Debt in advanced economies, since the global financial crisis, has increased quite substantially while the private sector has been very gradually leveraging, he added.

"If you look at emerging market economies, that includes India, you see that private debt in the last 10 years has increased quite substantially, although in the last two years, since the end of 2015, 2016 and 2017, there is a slowdown in the process of leveraging, but debt is very high and public debt is very high as well," Gasper said.

In the last few years in India private debt has declined from almost 60 per cent to 54.5.

"So, it's very stable. So, what you do see is that emerging market economies, which is where India is, there's a very fast buildup in private debt with a slowdown in the last two years, But India is basically steady. So, India is not an emerging market economy where leveraging is progressing fast," Gasper said.

According to Gasper, in emerging market economies private debt has risen much faster than public debt.

"Take China, for example. Total debt is 247 per cent of the GDP. But the dividing line between what is public and private debt in China is blurry. This blurriness reflects the very large number of public units and corporations, the complex layers of government, and widespread subnational off-budget borrowing," he said.

"As a result, estimates of 2017 public debt vary considerably: the official government debt figure is 37 per cent of GDP, while the data reported in the latest World Economic Outlook show it at 47 per cent of GDP, and the 'augmented' debt measure, which includes more off-budget borrowing by local governments, stands at 68 per cent of GDP," he said.

As China works to compile a full general government balance sheet, this picture will come into clearer focus, he added.

Gasper said China had substantial government assets, reflecting years of high infrastructure investment.

These assets are larger than its liabilities, putting net worth, the difference between assets and liabilities, well above 100 per cent of the GDP, the highest among emerging economies, he said.

"This is a significant buffer when compared to total debts of public corporations, particularly considering that public corporations also have assets. So, while debt-related risks in China are large, there are also buffers. Moreover, the government is taking steps to contain risks by reining in off-budget borrowing and strengthening oversight, resulting in a slowdown in the buildup of debt," he said.&nbsp;

India's debt is lower than the best or emerging market economies in the world, a top IMF official has said as he cautioned that the global debt has reached a new record high of USD 182 trillion in 2017.

India's debt is lower than the best or emerging market economies in the world, a top IMF official has said as he cautioned that the global debt has reached a new record high of USD 182 trillion in 2017. Vitor Gasper, International Monetary Fund (IMF) Director of Fiscal Affairs Department, said India's debt was substantially less than the global debt as percentage of world Gross Domestic Product (GDP). In India, private debt in 2017 was 54.5 per cent of the GDP and the general government debt was 70.4 per cent of the GDP, a total debt of about 125 of the GDP, according to the latest IMF figures. In comparison, the debt of China was 247 per cent of the GDP. "So, it (India's debt) is substantially less than the global debt as the percentage of world GDP," Gasper told PTI. India's debt is below the average of advanced economies and below the average of emerging market economies, he said. "There is a positive relationship between the debt to GDP ratio and the level of GDP per capita. If you compare around the world with the best economies or emerging market economies, the level of debt in India is lower," the top IMF official said. The IMF is very much stressing that global debt at USD 182 trillion in 2017 is at a new record high, he said. Debt in advanced economies, since the global financial crisis, has increased quite substantially while the private sector has been very gradually leveraging, he added. "If you look at emerging market economies, that includes India, you see that private debt in the last 10 years has increased quite substantially, although in the last two years, since the end of 2015, 2016 and 2017, there is a slowdown in the process of leveraging, but debt is very high and public debt is very high as well," Gasper said. In the last few years in India private debt has declined from almost 60 per cent to 54.5. "So, it's very stable. So, what you do see is that emerging market economies, which is where India is, there's a very fast buildup in private debt with a slowdown in the last two years, But India is basically steady. So, India is not an emerging market economy where leveraging is progressing fast," Gasper said. According to Gasper, in emerging market economies private debt has risen much faster than public debt. "Take China, for example. Total debt is 247 per cent of the GDP. But the dividing line between what is public and private debt in China is blurry. This blurriness reflects the very large number of public units and corporations, the complex layers of government, and widespread subnational off-budget borrowing," he said. "As a result, estimates of 2017 public debt vary considerably: the official government debt figure is 37 per cent of GDP, while the data reported in the latest World Economic Outlook show it at 47 per cent of GDP, and the 'augmented' debt measure, which includes more off-budget borrowing by local governments, stands at 68 per cent of GDP," he said. As China works to compile a full general government balance sheet, this picture will come into clearer focus, he added. Gasper said China had substantial government assets, reflecting years of high infrastructure investment. These assets are larger than its liabilities, putting net worth, the difference between assets and liabilities, well above 100 per cent of the GDP, the highest among emerging economies, he said. "This is a significant buffer when compared to total debts of public corporations, particularly considering that public corporations also have assets. So, while debt-related risks in China are large, there are also buffers. Moreover, the government is taking steps to contain risks by reining in off-budget borrowing and strengthening oversight, resulting in a slowdown in the buildup of debt," he said.

India's debt lower than best, emerging market economies: IMF

The Serious Fraud Investigation Office (SFIO) has narrowed on five arms of Infrastructure Leasing &amp; Financial Services (IL&amp;FS)that may have been involved in fund diversion and mismanagement, the Economic Times reported.

The government took control of the debt-laden IL&amp;FS last week after defaults on a string of debt obligations triggered wider concerns about risks in the country's financial sector.

The five companies under SFIO probe are IL&amp;FS Transportation Networks Ltd, IL&amp;FS Financial Services Ltd, IL&amp;FS Energy Development, IL&amp;FS Tamil Nadu Power and IL&amp;FS Engineering and Construction Company, the paper said.

The five firms constitute for more than 50 per cent of the entire group's revenue and may have diverted funds in projects that were worth 300 billion rupees ($4.04 billion), ET reported, citing two government officials.

The Institute of Chartered Accountants of India (ICAI) has also begun probing the matter and issued notices to statutory auditors seeking an explanation, it said.

IL&amp;FS Group, SFIO and ICAI did not immediately respond to requests seeking comment. 
&nbsp;

The Serious Fraud Investigation Office (SFIO) has narrowed on five arms of Infrastructure Leasing & Financial Services (IL&FS)that may have been involved in fund diversion and mismanagement, the Economic Times reported.

The Serious Fraud Investigation Office (SFIO) has narrowed on five arms of Infrastructure Leasing & Financial Services (IL&FS)that may have been involved in fund diversion and mismanagement, the Economic Times reported. The government took control of the debt-laden IL&FS last week after defaults on a string of debt obligations triggered wider concerns about risks in the country's financial sector. The five companies under SFIO probe are IL&FS Transportation Networks Ltd, IL&FS Financial Services Ltd, IL&FS Energy Development, IL&FS Tamil Nadu Power and IL&FS Engineering and Construction Company, the paper said. The five firms constitute for more than 50 per cent of the entire group's revenue and may have diverted funds in projects that were worth 300 billion rupees ($4.04 billion), ET reported, citing two government officials. The Institute of Chartered Accountants of India (ICAI) has also begun probing the matter and issued notices to statutory auditors seeking an explanation, it said. IL&FS Group, SFIO and ICAI did not immediately respond to requests seeking comment.

Frauds investigator probes five IL&FS firms for fund diversion: Report

India's retail inflation likely sped up in September on higher food and fuel costs, pushed up by a battered rupee and suggesting further policy tightening from the Reserve Bank of India, a Reuters poll found.

The Indian central bank last week held interest rates unchanged, surprising many market watchers who anticipated a third consecutive hike, but shifted its stance from "neutral" to "calibrated tightening" in a nod to pricing pressures.

The median of 45 economists in the poll taken Oct. 3-9 showed inflation was expected to have accelerated to the central bank's medium-term target of 4.00 per cent last month from a year ago, higher than August's 10-month low of 3.69 per cent.

Forecasts ranged from 3.60 per cent to 4.70 per cent, with over 40 per cent of economists expecting inflation to rise above the RBI's target, almost one-third forecast it to fall below target and the remaining 11 said it would be bang on 4.00 per cent.

"Consumer price inflation is likely to have risen in September, in large part because the recent sharp fall in food inflation appears to have reversed," said Shilan Shah, a senior India economist at Capital Economics.

"Core inflation is likely to have remained elevated. Despite the RBI keeping rates on hold last week, the tightening cycle still has a little bit further to run."

Although food inflation has quickened it was subdued enough to offset some of the pain coming from the double whammy of a weak currency and rising oil prices.

The rupee tumbled to a new low of 74.395 against the US&nbsp;dollar on Tuesday and Brent crude, India's costliest import item, hit a four-year high this month.

According to a separate Reuters poll, the struggling rupee, which has lost over 16 per cent against the greenback this year so far, was not expected to reverse its losses anytime soon.

"India's macro concern at the moment is not the rupee, but liquidity. If the RBI takes care of liquidity, then other concerns should gradually subside," said Shashank Mendiratta, economist at ANZ Bank.

"The RBI to that extent has taken steps to infuse liquidity by announcing OMOs (open market operations) and the similar measure will be taken up through this fiscal year."

Wholesale price inflation probably rose to 4.90 per cent in September from 4.53 per cent in August.

The poll forecast industrial output expanded 4.0 per cent in August from a year ago compared with 6.6 per cent in July.

That prediction was probably based on slower output growth from eight core industries - accounting for nearly 40 per cent of total industrial production - with annual production cooling to 4.2 per cent in August, from 7.3 per cent a month earlier.

India's retail inflation likely sped up in September on higher food and fuel costs, pushed up by a battered rupee and suggesting further policy tightening from the Reserve Bank of India, a Reuters poll found.

India's retail inflation likely sped up in September on higher food and fuel costs, pushed up by a battered rupee and suggesting further policy tightening from the Reserve Bank of India, a Reuters poll found. The Indian central bank last week held interest rates unchanged, surprising many market watchers who anticipated a third consecutive hike, but shifted its stance from "neutral" to "calibrated tightening" in a nod to pricing pressures. The median of 45 economists in the poll taken Oct. 3-9 showed inflation was expected to have accelerated to the central bank's medium-term target of 4.00 per cent last month from a year ago, higher than August's 10-month low of 3.69 per cent. Forecasts ranged from 3.60 per cent to 4.70 per cent, with over 40 per cent of economists expecting inflation to rise above the RBI's target, almost one-third forecast it to fall below target and the remaining 11 said it would be bang on 4.00 per cent. "Consumer price inflation is likely to have risen in September, in large part because the recent sharp fall in food inflation appears to have reversed," said Shilan Shah, a senior India economist at Capital Economics. "Core inflation is likely to have remained elevated. Despite the RBI keeping rates on hold last week, the tightening cycle still has a little bit further to run." Although food inflation has quickened it was subdued enough to offset some of the pain coming from the double whammy of a weak currency and rising oil prices. The rupee tumbled to a new low of 74.395 against the US dollar on Tuesday and Brent crude, India's costliest import item, hit a four-year high this month. According to a separate Reuters poll, the struggling rupee, which has lost over 16 per cent against the greenback this year so far, was not expected to reverse its losses anytime soon. "India's macro concern at the moment is not the rupee, but liquidity. If the RBI takes care of liquidity, then other concerns should gradually subside," said Shashank Mendiratta, economist at ANZ Bank. "The RBI to that extent has taken steps to infuse liquidity by announcing OMOs (open market operations) and the similar measure will be taken up through this fiscal year." Wholesale price inflation probably rose to 4.90 per cent in September from 4.53 per cent in August. The poll forecast industrial output expanded 4.0 per cent in August from a year ago compared with 6.6 per cent in July. That prediction was probably based on slower output growth from eight core industries - accounting for nearly 40 per cent of total industrial production - with annual production cooling to 4.2 per cent in August, from 7.3 per cent a month earlier.

India inflation likely rose to RBI's four percent target in September: Poll

The rupee slumped by 30 paise to finish at a fresh lifetime low of 74.06 against the US dollar Monday amid strengthening of the greenback and steady capital outflows.

The rupee had opened lower by 14 paisa against Friday's close of 73.76 in early trade as the US dollar strength against major global currencies weighed on the rupee sentiment.

At the Interbank Foreign Exchange (Forex) market, the local currency opened lower at 73.89 a dollar against its previous closing of 73.76.

It recovered to a high of 73.76, but failed to sustain the momentum and plunged to 74.10 and finally closed at 74.06, down by 30 paise, marking its fifth straight session of decline.

On Friday, the domestic unit plummeted by 18 paise to end at 73.76.

The rupee slumped by 30 paise to finish at a fresh lifetime low of 74.06 against the US dollar Monday amid strengthening of the greenback and steady capital outflows.

The rupee slumped by 30 paise to finish at a fresh lifetime low of 74.06 against the US dollar Monday amid strengthening of the greenback and steady capital outflows. The rupee had opened lower by 14 paisa against Friday's close of 73.76 in early trade as the US dollar strength against major global currencies weighed on the rupee sentiment. At the Interbank Foreign Exchange (Forex) market, the local currency opened lower at 73.89 a dollar against its previous closing of 73.76. It recovered to a high of 73.76, but failed to sustain the momentum and plunged to 74.10 and finally closed at 74.06, down by 30 paise, marking its fifth straight session of decline. On Friday, the domestic unit plummeted by 18 paise to end at 73.76.

Rupee slumps 30 paise to close at record low of 74.06

The rupee on Thursday crashed to a historic low of 73.81 to the dollar due to the twin-impact of capital outflows triggered by surging US Treasury yields and crude oil prices racing to a four-year high.

The domestic currency closed at a record low of 73.58, down by 24 paise or 0.33 per cent, marking its third straight session of losses. The rupee has lost 110 paise or 1.51 per cent in the three sessions since Monday largely due to strong demand dollar demand from oil importers amid firming oil prices and foreign capital outflows.

The US dollar strengthened against global peers after economic data signalled a thriving US economy which drove Treasury yields to a seven-year high of 3.23 per cent - a level not seen since mid-2011.

Hawkish comments about the US economy by Federal Reserve Chairman Jerome Powell have also boosted the dollar buying.

Emerging currencies including the rupee bore the brunt during the day as investors shifted funds from riskier assets to safe bets like the US dollar.

The dollar strengthened against the Chinese yuan by 0.2 per cent to 6.9 in the offshore market and touched a fresh 20-year high against the Indonesian rupiah. South African rand, Mexican peso and Australian dollar also dropped up to 1.5 per cent.

Brent crude also breached the four-year high of $86 dollar per barrel level, fuelling worries over widening current account and trade deficit.

Oil prices have reached four-year peaks as the market focused on upcoming US sanctions on Iran while shrugging off the year's largest weekly build in US crude stockpiles.

"The fall in the rupee led to a sharp rise in government bond yields, due to increasing expectations that the RBI's monetary policy committee (MPC) could go for a bigger rate increase than expected on Friday," V K Sharma, Head PCG &amp; Capital Markets Group HDFC Securities.

India's benchmark 10-year sovereign yield rose to 8.16 per cent.

Stocks markets crashed up to 2.24 per cent due to heavy selling pressure banking, energy, pharma and IT stocks.

Foreign investors remained net sellers for a third day pulling out Rs 2,760.63 crore from stock markets.

To stem the rupee fall, the RBI Wednesday allowed oil companies to access foreign capital of $10 billion on a long-term basis to finance their working capital requirements.

The government Thursday said state-owned fuel retailers will have to complete $10 billion external commercial borrowing (ECBs) within a year and they would not be required to hedge the exposure.

The central government and mostly BJP-led states announced a cut in excise and VAT rates to reduce fuel prices by Rs 5 per litre.

The rupee opened on a weak note at 73.72 against the previous close of 73.34 per dollar. It slid to an all-time low of 73.81 per dollar due to rising crude prices and reports that the RBI "cannot afford" a special swap window for oil importers to meet the dollar demand.

Bank of America Merrill Lynch in a report explained that pre-committing $8 billion a month for it over and above the $25-30 billion lost in interventions since April will push the overall forex reserves below the critical eight-month import cover mark.

The rupee, however, made a spirited recovery of 23 paise from lifetime lows in last 15 minutes of trade backed by the government steps to reduce oil prices. 
It finally settled at 73.58, it all-time closing low, with a loss of 24 paise.

The FBIL set the reference rate at 73.7509 for the US dollar and 84.6257 for the euro. The pound sterling was pegged at 95.3904 and Japanese yen at 64.49 for 100 rupees.&nbsp;

 
&nbsp;

The rupee on Thursday crashed to a historic low of 73.81 to the dollar due to the twin-impact of capital outflows triggered by surging US Treasury yields and crude oil prices racing to a four-year high.

The rupee on Thursday crashed to a historic low of 73.81 to the dollar due to the twin-impact of capital outflows triggered by surging US Treasury yields and crude oil prices racing to a four-year high. The domestic currency closed at a record low of 73.58, down by 24 paise or 0.33 per cent, marking its third straight session of losses. The rupee has lost 110 paise or 1.51 per cent in the three sessions since Monday largely due to strong demand dollar demand from oil importers amid firming oil prices and foreign capital outflows. The US dollar strengthened against global peers after economic data signalled a thriving US economy which drove Treasury yields to a seven-year high of 3.23 per cent - a level not seen since mid-2011. Hawkish comments about the US economy by Federal Reserve Chairman Jerome Powell have also boosted the dollar buying. Emerging currencies including the rupee bore the brunt during the day as investors shifted funds from riskier assets to safe bets like the US dollar. The dollar strengthened against the Chinese yuan by 0.2 per cent to 6.9 in the offshore market and touched a fresh 20-year high against the Indonesian rupiah. South African rand, Mexican peso and Australian dollar also dropped up to 1.5 per cent. Brent crude also breached the four-year high of $86 dollar per barrel level, fuelling worries over widening current account and trade deficit. Oil prices have reached four-year peaks as the market focused on upcoming US sanctions on Iran while shrugging off the year's largest weekly build in US crude stockpiles. "The fall in the rupee led to a sharp rise in government bond yields, due to increasing expectations that the RBI's monetary policy committee (MPC) could go for a bigger rate increase than expected on Friday," V K Sharma, Head PCG & Capital Markets Group HDFC Securities. India's benchmark 10-year sovereign yield rose to 8.16 per cent. Stocks markets crashed up to 2.24 per cent due to heavy selling pressure banking, energy, pharma and IT stocks. Foreign investors remained net sellers for a third day pulling out Rs 2,760.63 crore from stock markets. To stem the rupee fall, the RBI Wednesday allowed oil companies to access foreign capital of $10 billion on a long-term basis to finance their working capital requirements. The government Thursday said state-owned fuel retailers will have to complete $10 billion external commercial borrowing (ECBs) within a year and they would not be required to hedge the exposure. The central government and mostly BJP-led states announced a cut in excise and VAT rates to reduce fuel prices by Rs 5 per litre. The rupee opened on a weak note at 73.72 against the previous close of 73.34 per dollar. It slid to an all-time low of 73.81 per dollar due to rising crude prices and reports that the RBI "cannot afford" a special swap window for oil importers to meet the dollar demand. Bank of America Merrill Lynch in a report explained that pre-committing $8 billion a month for it over and above the $25-30 billion lost in interventions since April will push the overall forex reserves below the critical eight-month import cover mark. The rupee, however, made a spirited recovery of 23 paise from lifetime lows in last 15 minutes of trade backed by the government steps to reduce oil prices. It finally settled at 73.58, it all-time closing low, with a loss of 24 paise. The FBIL set the reference rate at 73.7509 for the US dollar and 84.6257 for the euro. The pound sterling was pegged at 95.3904 and Japanese yen at 64.49 for 100 rupees.

Rupee crashes to all-time low of 73.81 on capital outflows, surging oil prices

Finance Minister Arun Jaitley Thursday said the government is determined to contain the crisis at the IL&amp;FS at the earliest so that it does not leave any adverse impact.

The government earlier this week superseded the board of IL&amp;FS, which has a debt burden of Rs 91,000 crore and has defaulted on a series of loan repayments. The crisis at the IL&amp;FS has triggered concerns of a liquidity squeeze in the NBFCs and mutual funds.

The government has put in place a new board led by eminent banker Uday Kotak. The new board held its first meeting on Thursday.

"The government is determined to make sure that since this is an internal factor to India this should be contained quickly so that no adverse impact of it is left," Jaitley told reporters here.

He said there has been a "significant impact" on the markets in last few days on account of the contagion effect that took place on account of uncertainties over IL&amp;FS.

"The government has taken a decisive step in that regard, replaced the board and of course under the new board now it would take various decisions," he said.

Finance Minister Arun Jaitley Thursday said the government is determined to contain the crisis at the IL&FS at the earliest so that it does not leave any adverse impact.

Finance Minister Arun Jaitley Thursday said the government is determined to contain the crisis at the IL&FS at the earliest so that it does not leave any adverse impact. The government earlier this week superseded the board of IL&FS, which has a debt burden of Rs 91,000 crore and has defaulted on a series of loan repayments. The crisis at the IL&FS has triggered concerns of a liquidity squeeze in the NBFCs and mutual funds. The government has put in place a new board led by eminent banker Uday Kotak. The new board held its first meeting on Thursday. "The government is determined to make sure that since this is an internal factor to India this should be contained quickly so that no adverse impact of it is left," Jaitley told reporters here. He said there has been a "significant impact" on the markets in last few days on account of the contagion effect that took place on account of uncertainties over IL&FS. "The government has taken a decisive step in that regard, replaced the board and of course under the new board now it would take various decisions," he said.

Government determined to contain IL&FS crisis so that there is no adverse impact: Jaitley

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