The Indian government's announcement of a wave of measures designed to boost the fragile Indian rupee gave it little support yesterday as markets remained sceptical about the currency.
The finance minister, P Chidambaram, on Monday revealed plans to increase flows of foreign capital in the country and reduce import spend to narrow the country's gaping current account deficit.
These included liberalising rules for non-resident Indian's deposits, reducing gold imports, lowering spending on oil imports and allocating tax-free bonds for sovereign wealth funds.
Full details of all the measures were not provided, but more information began to emerge yesterday with the finance ministry announcing an increase in the import duty on gold to 10 per cent from 8 per cent.
The Indian rupee tumbled to a record low of 61.8 against the US dollar last week and has fallen by about 12 per cent since May.
The rupee yesterday was trading close to those lows and strengthened just marginally in the afternoon to around 61 against the dollar.
"Since the world economy is challenged, India's economy also faces challenges," said Mr Chidambaram.
"One of the main challenges is the current account deficit [CAD]. Investors and analysts have raised concerns about the CAD.
"Their concerns are reflected in the pressure on the exchange rate.
"The[central bank] has taken a number of measures to increase the interest rate at the short end and this has contained the depreciation of the rupee to some extent.
However, we believe that we have to do more to contain the CAD, to reduce volatility in the currency market and to stabilise the rupee."
Other measures include reducing the import of non-essential items, such as televisions.
Steps have also been taken to reduce imports of silver, with the government yesterday hiking the duty on the metal to 10 per cent from 6 per cent.
The finance ministry expects that the measure can help to contain the deficit at US$70 billion in the current financial year, which would amount to 3.7 per cent of GDP compared with 4.8 per cent in the last fiscal year.
Analysts pointed out that India needed much deeper structural reforms, such as investments in infrastructure, to make a sustained effect.
Gaurav Kashyap, the head of futures at Alpari ME, a global online currency and commodity broker, said that the Indian rupee remained "anaemic" despite the announcement.
The Reserve Bank of India last month took liquidity-tightening steps in an effort to boost the currency, which also failed to boost the rupee.
"Markets continue to test the resolve of the central bank and these Band-Aid solutions are not enough to change what is a deeply entrenched bearish sentiment for the currency," Mr Kashyap said.
"The numbers out of India continue to deteriorate amid a widening current account deficit. [Monday's] industrial output reading showed a larger than expected contraction in June, largely due to a sagging manufacturing sector and stubbornly high prices further complicate matters."
The rupee still has potential to slide further, he added.
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Dir: John Lucas and Scott Moore
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Two stars
THE SPECS
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Explainer: Tanween Design Programme
Non-profit arts studio Tashkeel launched this annual initiative with the intention of supporting budding designers in the UAE. This year, three talents were chosen from hundreds of applicants to be a part of the sixth creative development programme. These are architect Abdulla Al Mulla, interior designer Lana El Samman and graphic designer Yara Habib.
The trio have been guided by experts from the industry over the course of nine months, as they developed their own products that merge their unique styles with traditional elements of Emirati design. This includes laboratory sessions, experimental and collaborative practice, investigation of new business models and evaluation.
It is led by British contemporary design project specialist Helen Voce and mentor Kevin Badni, and offers participants access to experts from across the world, including the likes of UK designer Gareth Neal and multidisciplinary designer and entrepreneur, Sheikh Salem Al Qassimi.
The final pieces are being revealed in a worldwide limited-edition release on the first day of Downtown Designs at Dubai Design Week 2019. Tashkeel will be at stand E31 at the exhibition.
Lisa Ball-Lechgar, deputy director of Tashkeel, said: “The diversity and calibre of the applicants this year … is reflective of the dynamic change that the UAE art and design industry is witnessing, with young creators resolute in making their bold design ideas a reality.”
THE SPECS
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liverpool youngsters
Ki-Jana Hoever
The only one of this squad to have scored for Liverpool, the versatile Dutchman impressed on his debut at Wolves in January. He can play right-back, centre-back or in midfield.
Herbie Kane
Not the most prominent H Kane in English football but a 21-year-old Bristolian who had a fine season on loan at Doncaster last year. He is an all-action midfielder.
Luis Longstaff
Signed from Newcastle but no relation to United’s brothers Sean and Matty, Luis is a winger. An England Under-16 international, he helped Liverpool win the FA Youth Cup last season.
Yasser Larouci
An 18-year-old Algerian-born winger who can also play as a left-back, Larouci did well on Liverpool’s pre-season tour until an awful tackle by a Sevilla player injured him.
Adam Lewis
Steven Gerrard is a fan of his fellow Scouser, who has been on Liverpool’s books since he was in the Under-6s, Lewis was a midfielder, but has been converted into a left-back.
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Opening Rugby Championship fixtures:Games can be watched on OSN Sports
Saturday: Australia v New Zealand, Sydney, 1pm (UAE)
Sunday: South Africa v Argentina, Port Elizabeth, 11pm (UAE)
A MINECRAFT MOVIE
Director: Jared Hess
Starring: Jack Black, Jennifer Coolidge, Jason Momoa
Rating: 3/5
Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
NO OTHER LAND
Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal
Stars: Basel Adra, Yuval Abraham
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'Tell the Machine Goodnight' by Katie Williams
Penguin Randomhouse
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In numbers: PKK’s money network in Europe
Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010
Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille
Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm
Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year
Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”
Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners
TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013
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