Rupee Crashes To Lifetime Low of 69 Against US Dollar
New Delhi : The rupee fell to an all-time low against the US dollar on Thursday tracking Asian peers, with weakening macro-economic fundamentals on the domestic front also weighing on the currency. The dollar's sharp gain overnight coupled with falls in Asian peers caused the drop in early trade, traders said, adding they were hopeful the central bank would step in to prevent further losses. The rupee was trading at 68.92/93 to the dollar at 11.12 am, after hitting a life low of 69.0950 earlier in the session, and sharply lower than its previous close of 68.65/66.
The rupee's last record low was 68.8650 per dollar, hit on November 24, 2016.
The dollar was, however, steady against its peers on Thursday, having failed to extend overnight gains amid conflicting signals from Washington on a proposal to restrict Chinese investment as the bitter U.S.-China trade row kept financial markets on edge.
On the domestic front, a widening current account deficit (CAD) due to higher global crude oil prices and steady capital outflows have weighed on the rupee this year.
"Weakening at this pace shatters confidence. Markets expect RBI (Reserve bank of India) to manage the currency more effectively. The pressure on INR is high, thus in the absence of major action from regulators, 70 levels can be seen," the head of currency and debt trading at a foreign bank said. "The RBI has been effectively managing (the rupee) over the years, and they do have ample firepower to manage sharp falls."
Foreign exchange reserves stood at $410.07 billion as of June 15, latest RBI data showed.
Oil prices have been rallying for much of 2018 on tightening market conditions due to record demand and voluntary supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC).
Economy's March quarter CAD widened to $13.0 billion, or 1.9 per cent of GDP, from $2.6 billion, or 0.4 per cent of GDP, from a year earlier. Despite the rise in CAD, it remains modest relative to GDP and is largely financed by equity inflows, including foreign direct investment (FDI), Moody's said in a note on Thursday, adding that the large foreign exchange reserves provided a good buffer.
"India's low dependence on foreign-currency borrowing to fund its debt burden limits the risk of currency depreciation transmitting into materially weaker debt affordability," Moody's added.
courtesy : ndtv.com
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Karnataka cabinet decides to increase bus fare by 15 per cent
Bengaluru, Jan 2: The Karnataka cabinet on Thursday decided to increase the bus fares in the state-owned transport corporations by 15 per cent.
The decision was taken in view of the substantial hike in operational costs such as increase in spending on fuel prices and staff, Karnataka Law and Parliamentary Affairs Minister H K Patil said.
The opposition BJP lashed out at the Congress government in the state over its decision to hike bus fares.
Addressing reporters here, Patil said the decision will come into effect from January 5.
The move is expected to generate Rs 74.85 crore monthly and about Rs 784 crore annually.
“The cabinet has decided to revise the bus fare of the four state transport corporations -- KSRTC, NWKRTC, KKRTC and BMTC by 15 per cent,” he said.
According to Patil, the BMTC bus fares were increased on January 10, 2015 when the diesel prices were Rs 60.90 per litre.
“The daily diesel consumption was Rs 9.16 crore 10 years ago by the four corporations, which has now increased to Rs 13.21 crore. The expenditure on staff in these four corporations was Rs 12.95 crore daily, which has increased to Rs 18.36 crore daily. Hence the revision was necessary,” he said justifying the hike.
The Minister also underlined that 'Shakti' guarantee will continue.
Shakti offers free ride for Karnataka women in state-owned non-luxury buses across the state.
In the current fiscal, Rs 5,015 crore has been earmarked for the 'Shakti' scheme, the Minister explained.
Patil said, “Every month the state government is releasing Rs 417.92 crore grant to these four corporations. This will not be a burden on the state finance.”
He added, “With the hike in bus fares across all the categories of bus services, neither the transport corporations will go bankrupt, nor government exchequer will go empty. Mind you, we are the best state in terms of managing finances.”
Patil also said the state government has cleared all the provident fund dues to the tune of Rs 2,000 crore.
Regarding the decision he said, “We discussed about hike between 13 per cent and 15 per cent and the cabinet arrived at a decision of 15 per cent looking at the prices prevailing in Andhra Pradesh, Telangana and Maharashtra. After the rise of 15 per cent, we will be lesser than any of these states.”
In a post on X, BJP state president B Y Vijayendra said, "Chief Minister Siddaramaiah, with what face do you boast that you have given the five guarantee schemes to the people of the state? By failing to provide money for the Shakti Yojana, you have caused the transport company to tread the path of loss."
He said by increasing the bus fare by 15 per cent, the government line is that the bus travel is free for women, but it will definitely be a burden for men.
"The decision of the Congress government in Karnataka to increase the transport fare by 15 per cent is unscientific and anti-people and the BJP will raise its voice against this and support the people.
ಮುಖ್ಯಮಂತ್ರಿ @siddaramaiah ನವರೇ,
— Vijayendra Yediyurappa (@BYVijayendra) January 2, 2025
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