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IMF says ‘real’ depreciation of Indian rupee only 6-7 per cent

Press Trust of India

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Washington: The Indian rupee has ‘effectively’ depreciated only 6-7 per cent this year after adjusting it to inflation, almost half of the actual drop in the value of the currency this year, the International Monetary Fund (IMF) said.
The IMF, however, warned that the rupee depreciation would jack up the prices of imported goods such as oil and petroleum products, potentially putting an upward pressure on inflation.
IMF spokesperson Gerry Rice said the currencies of many of India’s trading partners, including those in the emerging markets, too have depreciated against the dollar.
“As a result, so far this year the real effective depreciation of the Indian rupee compared to December 2017, by our estimates, is between six and seven per cent,” Rice said.
The real effective exchange rate (REER) is the weighted average of a country’s currency in relation to an index or basket of other major currencies, adjusted for the effects of inflation.
The Indian currency has since the beginning of the year lost almost 13 per cent in value vis a vis the US dollar. He was responding to a question on the fall of the Indian currency in the last few months.
Observing that India is a relatively closed economy, he said the contribution of the net exports to growth in April to June quarter was again stronger than expected and the real depreciation of the rupee can be expected to reinforce this trend.
“On the other hand, the depreciation will obviously raise the prices of imported goods such as oil and petroleum products, potentially putting an upward pressure on inflation,” he said.
The Reserve Bank of India has taken the rising oil import prices into the account when it raised the policy rates in its last two meetings, he noted. Referring to a recent report of the IMF on India, Rice said the Indian economy is recovering strongly from the two transitory disruptions in recent years – the Goods and Services Tax (GST) and demonetisation.
India announced the demonetisation of all Rs 500 and 1000 banknotes in November 2016 to crack down on the use of illicit and counterfeit cash. The GST was launched in July 2017.
“Growth has been gradually accelerating in recent quarters, with strength in both consumption and investment, which have helped the economy,” he said.
Noting that the first quarter growth figures were somewhat stronger than the IMF had anticipated, Rice said the world body will be reviewing its forecast for India, taking account of it and the recent global developments.
Rice said the IMF continues to assess the impact of demonetisation on an ongoing basis. As with most things, there have been pluses and there have been minuses of demonetisation, he said.
“The demonetisation did hinder the money supply, creating cash shortages, which also somewhat dampened consumer and business sentiment,” he said, adding, it resulted in relative slowdown in growth.
“On the other hand, its positive effects, I think, included enhanced digitalisation and higher formalisation of the economy, which would help raise, amongst other things, the revenue and tax compliance,” he said.
According to the IMF spokesperson, there are already some signs of its positive effects.
“The growth in the number of new taxpayers, as documented by the Ministry of Finance, has been substantial in recent years,” he said, adding it is being monitored on an ongoing basis.


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Business

WPI inflation at 8-month low of 3.80 pc in Dec on softening fuel, food prices

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New Delhi: Inflation based on wholesale prices fell to a 8-month low of 3.80 per cent in December, 2018, on softening prices of fuel and some food items.

The Wholesale Price Index (WPI)-based inflation stood at 4.64 per cent in November, 2018, and 3.58 per cent in December 2017. According to the government data released on Monday, deflation in food articles stood at 0.07 per cent in December, against 3.31 per cent in November.

Vegetables, too, saw deflation at 17.55 per cent in December, compared to 26.98 per cent in the previous month. Inflation in the ‘fuel and power’ basket in December slumped to 8.38 per cent, nearly half of 16.28 per cent in November.

 

This was on account of lowering of prices of petrol and diesel through December. Individually, in petrol and diesel inflation was 1.57 per cent and 8.61 per cent, respectively, and for liquified petroleum gas (LPG) it was 6.87 per cent during December.

Among food articles, potato prices became cheaper substantially with inflation at 48.68 per cent in December, as against 86.45 per cent in November.

Inflation in pulses stood at 2.11 per cent, while in ‘egg, meat and fish’ it was 4.55 per cent. Onion witnessed deflation of 63.83 per cent in December, compared to 47.60 per cent in November.

The 3.80 per cent inflation is the lowest in 8 months, and a lower inflation than this was last seen in April at 3.62 per cent. Data for retail or consumer price index-based inflation would be released later in the day.

The Reserve Bank of India (RBI) mainly takes into account retail inflation data while formulating monetary policy. In its fifth monetary policy review for the fiscal, last month, the Reserve Bank kept interest rates unchanged, but held out a promise to cut them if the upside risks to inflation do not materialise.

The central bank lowered retail inflation projection to 2.7-3.2 per cent for the second half of the current fiscal, citing normal monsoon and moderate food prices.

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Air tickets, identity cards to become redundant; flyers can use facial recognition to enter airport

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New Delhi: The hassle to show air tickets and identity cards at Airport will be over as air travellers can soon enter airport with facial recognition biometric facility.

GMR Hyderabad International Airport Ltd (GHIAL) that operates the Rajiv Gandhi International Airport (RGIA), has successfully conducted the trial of facial recognition technology. During the first phase of the trial, employees of GHIAL were included. The second phase of the trial is expected to be launched by the end of this month, in which GHIAL will include common air fliers. And if the second phase of the trial is successful, GHIAL will implement facial recognition technology in Hyderabad airport from March onwards.

Three phases of facial recognition technology

 

First phase: GHIAL has installed facial recognition cameras in the Hyderabad. In the first phase, the imaging of passengers will be done through these cameras which will recognise the faces of the flyers.

Second phase: There would be a centralised registration system for passengers. Each passenger’s face will be attached with his/her photo identity like passport, Aadhaar, voting id, driving licence etc. The details of passengers along with his facial mapping will be scanned and stored by GHIAL through the centralised registration system at the Airport.

Third phase: The ID proof of the passengers along with their facial mapping will be stored at the e-boarding gate of the Airport.The data centres at Airlines will also have similar information. Whenever such passengers book tickets, the data system will alert the Hyderabad Airport authorities.

The moment you book a flight ticket originating from Hyderabad airport, your details will be shared by the data centre and the information will be given to all the concerned authorities.

When you reach the Hyderabad terminal gate, face recognition technology will identify you and all your details will be shared on the screen. The security personnel at the gate will access all your information via the system.

Similarly, your details can be accessed by the security personnel at the check-in counter, security check-in. Once the formalities are done, passengers will get an online boarding pass on their mobile phone.

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Maruti all-new WagonR 2019 available for booking at Rs 11,000

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New Delhi: Country’s largest car manufacturer Maruti Suzuki India on Monday said that its all-new WagonR is available for booking starting.

Customers can book the 3rd generation WagonR at authorized dealer network across the country by paying Rs 11,000. They can also book the car online.

The New WagonR is powered by the advanced K-series engine offering high fuel efficiency and an unmatched driving experience, Maruti said. The car now comes with a new 1.2 L engine option that delivers powerful and impressive performance coupled with great fuel economy. Customers will also have the choice of 1.0 L engine for the all-new WagonR.

 

Maruti Suzuki’s acclaimed two pedal technology will also be offered in the new WagonR. The Auto Gear Shift (AGS) offers. Maruti said that for the first it is going to offer the most innovative SmartPlay Studio infotainment experience in the Big New WagonR.

The car will be available in Pearl Poolside Blue, Pearl Nutmeg Brown, Magma Grey, Pearl Autumn Orange, Silky Silver and Superior White Range of variants. The Petrol: 1.0 L engine will be available in Lxi, Vxi / Vxi AGS variants while the Petrol: 1.2 L will be available in Vxi, Vxi AGS, Zxi / Zxi AGS variants.

“The new WagonR gets bigger with enhanced comfort. The car’s sturdy and masculine look with true tall boy design makes for a strong road presence. The Big New WagonR not only embodies strong looks but is also stronger inside out,” Maruti said in a release.

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