Indian rupee bounces back on signs Covid-19 crisis is abating

The rupee has staged a strong comeback, rebounding to become Asia’s top-performing currency from its worst on signs that India’s Covid-19 crisis may be easing.

India’s currency has climbed 1.7 per cent against the dollar in May to beat all its regional peers as the nation’s daily infections decline rapidly after touching a record high. The rupee also has the benefit of offering Asia’s highest carry returns.

The revival in the rupee’s fortunes reflects India’s efforts to tackle the pandemic, with local lockdowns helping to rein in daily cases, which were the world’s highest in April. Still, the central bank may be wary of a stronger currency given its adverse impact on exports at a time when the economy is emerging from a recession.

“High carry and low volatility are making the rupee stand out” amid hopes that the worst of the virus wave may be over, said Anindya Banerjee, currency strategist at Kotak Securities. The Reserve Bank of India may step in at some stage to limit the currency’s gains, he added.

The rupee tumbled to the lowest in nine months in April as daily coronavirus infections soared above 300,000, triggering the unwinding of up to $50 billion in carry trades. But the situation is still grim with the nation reporting 196,427 infections and 3,511 deaths on Tuesday, suggesting India still has some way to go to rein in the pandemic.

The currency may also get a lift as investors convert dollars from a slew of upcoming initial public offerings into rupees. Online food delivery start-up Zomato’s $1.1bn share offering is among the upcoming IPOs.

Barclays expects the rupee to climb to 72.50 per dollar by next quarter from around 73 now owing to supportive flows, attractive valuations and a less interventionist RBI, according to a note published this week. The rupee rose 0.2 per cent on Tuesday to 72.8575 per dollar.

Besides a more favourable trajectory of reported cases, the rupee has also drawn in speculative funds by offering the highest carry trade returns in the region.

“A lot of the appreciation is due to the revival in carry trades,” said Bhaskar Panda, senior vice president, Treasury Advisory Group at HDFC Bank. Earlier, the unwinding happened as there was a trigger in terms of higher cases. “Now, they are re-positioning.”

Key facilities

Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
Premier League-standard football pitch
400m Olympic running track
NBA-spec basketball court with auditorium
600-seat auditorium
Spaces for historical and cultural exploration
An elevated football field that doubles as a helipad
Specialist robotics and science laboratories
AR and VR-enabled learning centres
Disruption Lab and Research Centre for developing entrepreneurial skills

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Key figures in the life of the fort

Sheikh Dhiyab bin Isa (ruled 1761-1793) Built Qasr Al Hosn as a watchtower to guard over the only freshwater well on Abu Dhabi island.

Sheikh Shakhbut bin Dhiyab (ruled 1793-1816) Expanded the tower into a small fort and transferred his ruling place of residence from Liwa Oasis to the fort on the island.

Sheikh Tahnoon bin Shakhbut (ruled 1818-1833) Expanded Qasr Al Hosn further as Abu Dhabi grew from a small village of palm huts to a town of more than 5,000 inhabitants.

Sheikh Khalifa bin Shakhbut (ruled 1833-1845) Repaired and fortified the fort.

Sheikh Saeed bin Tahnoon (ruled 1845-1855) Turned Qasr Al Hosn into a strong two-storied structure.

Sheikh Zayed bin Khalifa (ruled 1855-1909) Expanded Qasr Al Hosn further to reflect the emirate's increasing prominence.

Sheikh Shakhbut bin Sultan (ruled 1928-1966) Renovated and enlarged Qasr Al Hosn, adding a decorative arch and two new villas.

Sheikh Zayed bin Sultan (ruled 1966-2004) Moved the royal residence to Al Manhal palace and kept his diwan at Qasr Al Hosn.

Sources: Jayanti Maitra, www.adach.ae

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Know before you go

Jebel Akhdar is a two-hour drive from Muscat airport or a six-hour drive from Dubai. It’s impossible to visit by car unless you have a 4x4. Phone ahead to the hotel to arrange a transfer.
If you’re driving, make sure your insurance covers Oman.
By air: Budget airlines Air Arabia, Flydubai and SalamAir offer direct routes to Muscat from the UAE.
Tourists from the Emirates (UAE nationals not included) must apply for an Omani visa online before arrival at evisa.rop.gov.om. The process typically takes several days.
Flash floods are probable due to the terrain and a lack of drainage. Always check the weather before venturing into any canyons or other remote areas and identify a plan of escape that includes high ground, shelter and parking where your car won’t be overtaken by sudden downpours.

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The National Archives, Abu Dhabi

Founded over 50 years ago, the National Archives collects valuable historical material relating to the UAE, and is the oldest and richest archive relating to the Arabian Gulf.

Much of the material can be viewed on line at the Arabian Gulf Digital Archive - https://www.agda.ae/en