S&T

 

1. ‘Zoom’ is not a safe platform, says MHA advisory

 

—The Ministry of Home Affairs (MHA) has issued an advisory that Zoom video conference is not a safe platform.

—The Cyber Coordination Centre of the MHA issued a set of guidelines for its safe usage by private individuals. It was not for use by government offices and officials, the MHA noted.

—The advisory said the Indian Computer Emergency Response Team (CERT-In) issued two advisories cautioning on the use of Zoom for office meetings.

—The Ministry asked the users to set strong passwords and enable “waiting room” feature so that call managers could have a better control over the participants.

— It also asked the users to avoid using personal meeting ID to host events and instead use randomly generated meeting IDs for each event and asked to not share links on public platforms.

 

Background:

—U.S. based Zoom video communication has seen an exponential rise in usage in India as office-goers remain at home owing to the lockdown triggered by the COVID-19 pandemic.

—The software used in the online platform is said to be made in China and some calls were being routed through servers in China.

—Zoom started facing criticism as reports of ‘Zoombombing’ and other privacy issues started surfacing from different parts of the world

—On April 3, Citizen Lab, based at the University of Toronto, found “significant weakness” in Zoom’s encryption that protects meetings done using the teleconference app. It also identified potential areas of concern in Zoom’s infrastructure, including observing the transmission of meeting encryption keys through China.

—The Citizen Lab highlighted that while Zoom was a Silicon Valley-based company, it appeared to own three companies in China through which at least 700 employees were paid to develop Zoom’s software.

 

About CERT- In

—The Indian Computer Emergency Response Team (CERT-In) is an office within the Ministry of Electronics and Information Technology.

—It is the nodal agency to deal with cyber security threats like hacking and phishing. It strengthens security-related defence of the Indian Internet domain.

 

Reference: https://www.thehindu.com/news/national/zoom-is-not-a-safe-platform-says-mha-advisory/article31355460.ece

 

2. Delhi govt. gets Centre’s nod to start plasma enrichment technique trial

 

—Delhi government has been given permission by the Centre to start clinical trial of plasma enrichment technique on COVID-19 patients, who are critically ill.

 

What is plasma transfusion technique?

—The plasma transfusion technology involves taking the blood of a person who has recovered from COVID-19 that has anti-bodies that helped the person recover in the first place.

—Plasma is then extracted from the blood, is enriched, and is then injected into an infected person.

—The antibodies from the recovered person then enter the body of the infected patient and help them recover.

 

Reference: https://www.thehindu.com/news/cities/Delhi/delhi-govt-gets-centres-nod-to-start-plasma-enrichment-technique-trial/article31360620.ece

 

3. Pinarayi helping firm in exploiting health data

 

—Leader of the Opposition in Kerala Ramesh Chennithala accused Chief Minister Pinarayi Vijayan of opening the door for U.S.-based firm Sprinklr to exploit the personal health data of Keralites for profit.

—Sprinklr possesses the data of nearly 1.75 lakh Keralites. Ernst and Young had pegged the value of the private medical information of an individual at ₹10,000. Forbes valued it at ₹75,000.

—By a conservative estimate, Sprinklr held medical information worth ₹700 crores. It could easily palm off the data to private players in the pharmaceutical and health sector without the consent of the government or the knowledge of citizens.

 

Sprinklr:

-Sprinklr is a privately held New York City-based software company that develops a SaaS customer experience management (CXM) platform.

 -The company's software, also called Sprinklr, utilizes artificial intelligence and combines different applications for social media marketing, social advertising, content management, collaboration, employee advocacy, customer care, social media research and social media monitoring.

-Sprinklr was founded in 2009 by technology executive Ragy Thomas, and by July 2016 was valued at $1.8 billion, giving it Unicorn status.

 

Reference: https://www.thehindu.com/news/national/kerala/pinarayi-helping-firm-in-exploiting-health-data/article31360047.ece

 

3. Virtual reality: On telemedicine

 

—The Centre’s recent guidelines allowing for widespread use of telemedicine services came as a shot in the arm for telehealth crusaders in the country, among them the Telemedicine Society of India that has long been battling to use the technology in its complete arc to reach remote areas in India.

—This move finds consonance with the rest of the world where several nations, also deeply impacted by the pandemic, have deployed telemedicine to reach people who have been unable to come to hospital, to reduce footfalls in hospitals and to even provide medical and mental health counselling to countless people.

 

What is telemedicine?

— Telemedicine is used to describe remote clinical services, such as diagnosis and monitoring. When rural settings, lack of transport, a lack of mobility, decreased funding, or a lack of staff restrict access to care, telehealth may bridge the gap.

—It was way back in 2000 that telemedicine was first employed in India, but the progress has been excruciatingly slow, until the pandemic.

—The advantages are peculiar in the current context, when putting distance between people is paramount, as tele consultations are not barred even when health care professionals and patients may have to be quarantined.

—The advancement of telecommunication capabilities over the years has made the transmission of images and sound files (heart and lung sounds, coughs) faster and simpler.

—Pilot telemedicine experiments in ophthalmology and psychiatry have proven to be of immense benefit to the communities.

—While unleashing the full potential of telemedicine to help people, experts and government agencies must be mindful of the possible inadequacies of the medium, and securing sensitive medical information; such cognisance should guide the use of the technology.

 

Reference: https://www.thehindu.com/opinion/editorial/virtual-reality-the-hindu-editorial-on-telemedicine/article31359228.ece

 

4. Coronavirus | Plea in Supreme Court against use of ‘unproven’ drug

 

—A petition filed in the Supreme Court contends that seriously ill corona virus (COVID-19) patients in intensive care units in hospitals are subjected to “controversial, unproven, non-specific and potentially toxic off-label” use of anti-malarial drug Hydroxychloroquine and broad-spectrum antibiotic Azithromycin without taking any precautionary measures to prevent cardiac complications and possible death.

—NGO People for Better Treatment drew the court’s attention to an extraordinary bulletin issued jointly on April 8 by the American Heart Association (AHA), the American College of Cardiology (ACC) and the Heart Rhythm Society (HRS) with stark warnings to doctors about the use of these two drugs on COVID-19 patients with existing cardiac conditions.

—The bulletin had said the use of these drugs on patients with cardiac conditions would possibly trigger arrythmia (abnormal heartbeat), heart failure and even death. It had advised to follow specific therapeutic measures in such cases.

 

About Hydroxychloroquine (HCQ)

—Sold under the brand name Plaquenil among others, it is a medication used to prevent and treat malaria in areas where malaria remains sensitive to chloroquine.

—Other uses include treatment of rheumatoid arthritis, lupus, and porphyria cutanea tarda.

—It is taken by mouth.

—It is also being studied as a treatment for corona virus disease 2019 (COVID-19).

 

About Azithromycin

—It is an antibiotic used for the treatment of a number of bacterial infections.

—This includes middle ear infections, strep throat, pneumonia, traveller’s diarrhea, and certain other intestinal infections.

—It can also be used for a number of sexually transmitted infections, including Chlamydia and gonorrhoea infections.

—Along with other medications, it may also be used for malaria.

 

Reference: https://www.thehindu.com/news/national/plea-in-supreme-court-against-hydroxychloroquine-use-in-hospitals/article31358901.ece

 

5. Mumbai students develop AI-based voice tool to detect COVID-19

 

-A university in Rome is conducting a pilot run for a patented artificial intelligence-based tool developed by three biotechnology students and a professor from Mumbai, which they claim can test COVID-19 through voice-based diagnosis using a Smartphone.

 

-The tool is being tested by the University of Tor Vergata in Rome and has already been tested on 300 individuals.

-Indian tool is fully functional and currently in use in Italy to identify COVID-19 patients. The students have full-fledged working software with a rich database of patients and healthy samples.

-This tool is being currently used by the University of Rome to detect COVID-19 patients with 98% accuracy.

 

Mechanism behind the Test:

-Each human voice has 6,300 parameters and only a few units, less than a dozen, specifically characterise individuals.

-The human ear, apart from colds, is not able to distinguish them, but artificial intelligence does. Each one of our internal organs is sort of a resonator, so if we have a problem with our lungs or our heart, this is reflected in our voice.

 

https://www.thehindu.com/sci-tech/technology/mumbai-students-develop-ai-based-voice-tool-to-detect-covid-19/article31360091.ece

 

 

INTERNATIONAL

 

1. 1.      Across the gulf: On stranded Indian workers

 

—Around eight million people in the Gulf Cooperation Council (GCC) countries constitute a unique cohort among Indian Diaspora communities around the world.

—Around 50% of them are unskilled and another 30% are semi-skilled. Only a small minority of 20% of them are skilled and lucratively employed, but all these migrant workers together form the backbone of India’s ties with the region.

—Their contribution of nearly 40% of the total foreign exchange remittances to India is critical to its economy. Their labour is vital for the GCC economy.

—The vast majority of them who are on subsistence wages are facing a tough situation in the wake of the COVID-19 pandemic.

—Living and working conditions make it extremely difficult for them to practise social distancing or get treatment if infected. Many of them suffer from pre-existing medical conditions and are used to procuring medicines from India, which is now impossible.

—Vast sectors of the economy are shut, rendering many of them jobless. Thousands are without documentation. Dubai, Abu Dhabi and Doha being important transits for international travel, thousands of Indian travellers are also stuck in the region.

 

What India must do?

—It must work closely with governments of the region to bring them succour.

—Prime Minister Narendra Modi has nurtured good relations with all rulers of the region but the ongoing crisis is testing the endurance of India’s ties with some of the GCC countries.

—Pinarayi Vijayan, the Chief Minister of Kerala, which is home to more than two million Indian immigrants in the Gulf, has said the State is prepared to receive returnees and provide them care.

—Uttar Pradesh, Bihar and Punjab have a significant number of people in the Gulf.

—The Centre must take the initiative to bring together State governments, and work out arrangements with national governments in the region in a manner acceptable to all.

—It will certainly take some effort to arrive at what is doable and desirable at this juncture, but there is no excuse for not doing that.

 

About GCC

— The Cooperation Council for the Arab States of the Gulf originally known as the Gulf Cooperation Council is a regional intergovernmental political and economic union consisting of all Arab states of the Persian Gulf except Iraq, namely: Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates.

—The Charter of the GCC was signed on 25 May 1981, formally establishing this institution.

 

Reference: https://www.thehindu.com/opinion/editorial/across-the-gulf-the-hindu-editorial-on-stranded-indian-workers/article31359247.ece

 

2. Extend Brexit transition, says IMF

 

—Britain should ask for an extension to its post-Brexit transition period to ease uncertainty at a time when the world economy is being hammered by the COVID-19 pandemic, the head of the International Monetary Fund said.

—The transition period is due to end on December 31, and barriers to exports and imports will go up if a new trade agreement is not reached by then, a challenge, which has been made harder by the pandemic.

 

About IMF

— The International Monetary Fund (IMF) is an international organization headquartered in Washington, D.C., consisting of 189 countries working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world while periodically depending on the World Bank for its resources.

—Formed in 1944 at the Bretton Woods Conference primarily by the ideas of Harry Dexter White and John Maynard Keynes, it came into formal existence in 1945 with 29 member countries and the goal of reconstructing the international payment system.

—It now plays a central role in the management of balance of payments difficulties and international financial crises.

—Countries contribute funds to a pool through a quota system from which countries experiencing balance of payments problems can borrow money.

 

About Brexit

— Brexit is the withdrawal of the United Kingdom (UK) from the European Union (EU).

—Following a UK-wide referendum in June 2016, in which 52% voted to leave and 48% voted to remain in the EU, the British government formally announced the country's withdrawal in March 2017, beginning the Brexit process.

—This began a transition period that is set to end on 31 December 2020, during which the UK and EU will negotiate their future relationship.

—The UK remains subject to EU law and remains part of the EU customs union and single market during the transition, but is no longer part of the EU's political bodies or institutions.

 

Reference: https://www.thehindu.com/news/international/extend-brexit-transition-says-imf/article31359906.ece

 

3. China may have conducted N-test: U.S.

 

—China may have secretly set off low-level underground nuclear test explosions despite claiming to observe an international pact banning such blasts, the U.S. State Department said.

—The finding may worsen ties already strained by U.S. charges that the global COVID-19 pandemic resulted from Beijing’s mishandling of a 2019 outbreak of the corona virus in the city of Wuhan.

—U.S. concerns about Beijing’s possible breaches of a “zero yield” standard for test blasts have been prompted by activities at China’s Lop Nur nuclear test site throughout 2019, the State Department report said.

—Beijing’s lack of transparency included blocking data transmissions from sensors linked to a monitoring centre operated by the international agency that verifies compliance with a treaty banning nuclear test explosions.

—The 1996 Comprehensive Test Ban Treaty (CTBT) allows activities designed to ensure the safety of nuclear weapons.

 

‘Zero yield’

—Zero yields refer to a nuclear test in which there is no explosive chain reaction of the type ignited by the detonation of a nuclear warhead.

 

About CTBT

— The Comprehensive Nuclear-Test–Ban Treaty (CTBT) is a multilateral treaty that bans all nuclear explosions, for both civilian and military purposes, in all environments.

—It was adopted by the United Nations General Assembly on 10 September 1996 but has not entered into force, as eight specific nations have not ratified the treaty.

— The treaty will enter into force 180 days after the 44 states listed in Annex 2 of the treaty have ratified it.

—These "Annex 2 states" are states that participated in the CTBT's negotiations between 1994 and 1996 and possessed nuclear power reactors or research reactors at that time.

—As of 2016, eight Annex 2 states have not ratified the treaty: China, Egypt, Iran, Israel and the United States have signed but not ratified the Treaty; India, North Korea and Pakistan have not signed it.

 

Reference: https://www.thehindu.com/news/international/china-may-have-conducted-n-test-us/article31359921.ece

 

4. Wuhan’s ‘wet markets’ reopen, face heat

 

—At a large food market in the Chinese city of Wuhan, signs forbid the selling of wild animals and live fowl, while announcements calling for “victory” over COVID-19 play on a loop from speakers.

—China’s “wet markets” have been slammed internationally as the corona virus roils the world, with the disease having seemingly emerged from stalls selling live animals in Wuhan late last year.

—The government has since banned the sale of wildlife for food, but the reopening of markets has drawn criticism from around the world as the death toll from the pandemic continues to mount.

—One market remains closed: The Huanan Seafood Market that sold a range of exotic wildlife and is suspected to be the cradle of the virus that jumped from animals to humans.

 

What are wet markets?

—Wet markets are popular venues to buy fresh meat, vegetables and fish across Asia -- most selling common, everyday produce to locals at affordable prices.

—Most don’t sell live animals, although some do.

—During visits to three Wuhan markets this week, AFP saw live turtles, frogs, fish and crustaceans for sale, but no fowl or mammals blamed for past diseases.

 

Reference: https://www.thehindu.com/news/international/wuhans-wet-markets-reopen-face-heat/article31359425.ece

 

ECONOMY

 

1. A blueprint to revive the economy

 

—The phrase ‘Greater Depression’, which has entered the vocabulary of economists, highlights the gravity of the humanitarian and economic crisis confronting us today.

 

Demand, supply challenges

—First, it is important to diagnose the scale of the economic crisis accurately. The economic crisis needs a demand side and a supply side response. It is morally imperative that we immediately address the miseries of the poor and vulnerable by providing money as well as food.

—The bottom half of all households (13 crores out of 26 crores families) must be given ₹5,000 per family in their bank account within a week.

—The list of households and the bank details (largely Aadhaar-seeded) are available in the government’s various schemes such as PMJAY and MGNREGA.

—Besides, the States have their ‘below poverty line’ lists. This will cost a maximum of ₹65,000 crores. Further, depending on the need, for the month of May, these families can be given ₹3,000 each. This will cost an additional ₹39,000 crores.

—More than cash, scholars like Jean Dreze have observed that it is food that people need most urgently. India has far in excess of the buffer stock requirement. The Central government has already announced distribution of free food, but reports suggest that there is either lack of food supplies at the local ration shop or identity requirements of ration cards are proving to be a roadblock.

— The government must universalise food distribution immediately, to remove identity requirements and work with State governments to rush supplies to every ration shop so that every family gets free grain.

 

—Next, the April 15 guidelines allow MGNREGA work, which was stopped due to the lockdown, to be restarted while observing social distancing norms.

—District collectors should be given the freedom to start and expand works under MGNREGA.

—If work cannot be given for some reason, 10 days’ wages every month should be paid to the registered MGNREGA workers in the Panchayats/block until the scheme is resumed. This will ensure some livelihood support.

—Economists Amartya Sen, Raghuram Rajan and Abhijit Banerjee have also called for urgent implementation of these measures.

 

—The next step is to help employers to resume commercial activities, which can be done by re-opening the economy gradually.

—The key to reopening is our ability to identify sensitive COVID-19 hotspot areas and containment zones.

—The Central and State governments must work in tandem to identify hotspots, preferably at the level of the block/mandal and not just at the district level. This can be done with the help of public health experts and epidemiologists through strategic testing.

 

Planning ahead

—Starting May 4, the new guidelines must be expanded to permit all economic activity (with a few exceptions) in non-hotspot areas.

—Economic activity requires labour and capital, which are significantly diminished due to the lockdown.

—Continuous testing and monitoring will be needed as new areas may turn into hotspots and hotspots may become non-hotspots.

—Let small shops, service establishments and the self-employed start commercial activity in their areas. Three-quarters of the 80 million enterprises are establishments that operate in local areas. As long as they observe the usual precautions, they will not add to the risks. This will boost local economic activity.

—The new guidelines permit agricultural activity during the rabi harvest season. This is a step in the right direction.

—However, the constraint for all these commercial and agricultural activities will be the availability of labour for which re-opening of travel and transport is crucial. However, it is also the riskiest.

—Mass rapid transit as well as private transport must be gradually opened in non-hotspot areas. It is necessary to open up rail and bus transport with adequate precautions such as temperature checks and social distancing norms inside buses and trains. One strategy could be to reduce the number of passengers in each bus and train by increasing the frequency of the vehicles or by running them at half-capacity.

—There will be trade-offs, but each local transport authority can choose the right policy and tweak it from time to time.

 

Funding the revival

—The other essential ingredient for resumption of economic activity is access to capital, especially working capital.

—A majority of the small and medium enterprises (SMEs) would have run out of cash and lost significant revenues. No bank is likely to lend to them.

—The government must step in to provide credit guarantees that can incentivise banks to SMEs. The Reserve Bank of India (RBI) has already instructed banks to issue a moratorium on loan obligations for three months. If needed, this can be extended by another three months.

—For the formal sector, we can take a leaf out of the U.S.’s Paycheque Protection Program. The idea is for the government to help formal sector businesses to keep workers on their payroll without resorting to retrenchment or lay-offs.

—The 2017-18 Economic Survey estimated, using the Employees’ Provident Fund Organisation (EPFO) data set, that there are 40 million employees earning less than ₹15,000 per month who are employed in firms registered under the Goods and Services Tax (GST). It is likely that they are vulnerable to retrenchment.

—The government could ‘protect their pay cheques’ by funding their employers to pay them for one or two months. This can be implemented using data from the EPFO and GST databases.

—The RBI, and through it the banks, should be encouraged to make capital available liberally to sectors such as tourism and manufacturing, which need specific interventions. External trade will continue to be tepid.

—India must do whatever it takes through export incentives and strategic use of foreign exchange reserves to capitalise on the export opportunity arising out of this crisis and stimulate exports dramatically over the next few years.

—Exports can be the key to jobs for hundreds of millions of skilled and unskilled workers, as it was during the boom years 2004-2010.

—Fiscal stimulus measures on the demand and supply side must be supplemented by monetary stimulus from the RBI with re-designed measures such as moratorium, loan forgiveness, regulatory forbearance, revised NPA regulations and easing the cycle of credit flow.

 

About EPFO

— The Employees' Provident Fund Organisation (abbreviated to EPFO), is an organization tasked to assist the Central Board of Trustees, Employees' Provident Fund a statutory body formed by the Employees' Provident Fund and Miscellaneous Provisions Act, 1952 and is under the administrative control of the Ministry of Labour and Employment, Government of India.

 

About PMJAY

— Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (AB PM-JAY) is a flagship scheme of the Indian government's National Health Policy, which aims to provide free health coverage at the secondary and tertiary level to its bottom 40% poor and vulnerable population.

— PM-JAY is the world's largest and fully state sponsored health assurance scheme.

—It was launched in September 2018, under the aegis of Ministry of Health and Family Welfare in India.

 

Key Features     

—PM-JAY is a health assurance scheme that covers 10.74 crores households across India or approx 50 cr Indians.

—It provides a cover of 5 lakh per family per year for medical treatment in empanelled hospitals, both public and private.

—It provides cashless and paperless service to its beneficiaries at the point of service, i.e. the hospital.

—E-cards are provided to the eligible beneficiaries based on the deprivation and occupational criteria of Socio-Economic Caste Census 2011 (SECC 2011).

—There is no restriction on family size, age or gender.

—All previous medical conditions are covered under the scheme.

—It covers 3 days of hospitalisation and 15 days of post hospitalisation, including diagnostic care and expenses on medicines.

—The scheme is portable and a beneficiary can avail medical treatment at any PM-JAY empanelled hospital outside their state and anywhere in the country.

 

Reference: https://www.thehindu.com/opinion/lead/a-blueprint-to-revive-the-economy/article31359290.ece

 

2. Coronavirus | Centre issues SOP for kharif crops sowing

 

—The Union Agriculture Ministry laid down the standard operating procedure (SOP) to guide farmers on safety precautions that need to be strictly followed during planting of kharif crops amid the threat of COVID-19 pandemic.

—As per the SOP, social distancing and sanitization norms should be followed during field preparation, sowing and fertiliser application.

 

About Kharif crops

— The Kharif season varies by crop and region, starting at the earliest in May and ending at the latest in January. In India, the season is popularly considered to start in June and to end in October.

—Kharif crops are usually sown with the beginning of the first rains during the advent of the south-west monsoon season, and they are harvested at the end of monsoon season (October-November).

 

Reference: https://www.thehindu.com/news/national/coronavirus-centre-issues-sop-for-kharif-crops-sowing/article31360118.ece

 

3. SBI to extend additional term loan facilities to borrowers, including NBFCs

 

—State Bank of India, the country’s largest lender, has decided to extend term loan facilities to non-banking finance companies (NBFCs) as well as other companies to help tide over the liquidity mismatch these entities are facing due to the nationwide lockdown.

—The NBFC sector faced a double whammy when RBI announced a loan moratorium for three months.

—While banks have not offered a moratorium to NBFC borrowers, these entities had to offer the moratorium to their customers who had taken a home or car loan, resulting in a liquidity mismatch for NBFCs.

—Crisil had said NBFCs rated by it would face ₹1.75 lakh crores of debt obligation maturing by the end of the April-June quarter.

 

About NBFC

— The most important difference between non-banking financial companies and banks is that NBFCs don't take demand deposits. A non-banking financial institution (NBFI) or non-bank financial company (NBFC) is a financial institution that does not have a full banking license or is not supervised by a national or international banking regulatory agency.

—NBFI facilitate bank-related financial services, such as investment, risk pooling, contractual savings, and market brokering.

 Examples of these include insurance firms, pawn shops, cashier's check issuers, check cashing locations, payday lending, currency exchanges, and microloan- organizations.

 

Reference: https://www.thehindu.com/business/sbi-to-extend-additional-term-loan-facilities-to-borrowers-including-nbfcs/article31359394.ece

 

4. Nationwide lockdown may be bitter for sugar

 

—The countrywide lockdown is likely to have an impact on domestic sugar consumption this season (October 2019 to September 2020).

—According to the Indian Sugar Mills Association (ISMA), sugar sales and despatches have been affected because of the lockdown. Almost 65 % of the sugar consumption in the country is by bulk buyers.

 

Increase in demand

—The supply chain pipeline usually holds one million to 1.5 million tonnes. This will dry up during the lockdown and there may be an increase in demand when the lockdown is lifted.

—However, the domestic consumption this season may be 25 million tonnes, which is slightly less than the expected demand, association sources said.

—Exports have also been affected because of the drop in global sugar prices.

—Meanwhile, Indonesia is opening up its market for Indian sugar, giving preferential duty and this will create demand for Indian sugar in that country, the ISMA added.

—There were problems in ethanol off take when the lockdown came into force. Now, ethanol supplies have shifted to other States and depots where there is hardly any or nil supply.

—Further, a majority of the sugar mills have started making hand sanitisers, using part of the ethanol available with them, the ISMA said.

 

Reference: https://www.thehindu.com/business/nationwide-lockdown-may-be-bitter-for-sugar/article31359462.ece

 

5. Rupee hits a new low

 

-The rupee hit a new low against the dollar as it dropped to 76.87 amid concerns of a delay in economic revival following the spread of COVID-19.

-The rupee will continue to be under pressure till signs of the pandemic peaking emerge.

-Depreciation of the Indonesian rupiah and Indian rupee increases risks for some companies with currency mismatches and heavy reliance on U.S. dollar debt

 

Currency Depreciation:

-Easy monetary policy and high inflation are two of the leading causes of currency depreciation. In a low interest-rate environment, hundreds of billions of dollars chase the highest yield.

-Expected interest rate differentials can trigger a bout of currency depreciation. While central banks increase interest rates to combat inflation, too much inflation can threaten stability and cause currency depreciation.

-Additionally, inflation can lead to higher input costs for export, which makes a nation's exports less competitive in global markets, which widens the trade deficit and causes the currency to depreciate.

-Currency depreciation is a fall in the value of a currency in a floating exchange rate system.

-Economic fundamentals, interest rate differentials, political instability or risk aversion can cause currency depreciation.

-Orderly currency depreciation can increase a country’s export activity as its products and services become cheaper to buy.

-The Federal Reserve quantitative easing programs used to stimulate the economy in the aftermath of the 2007-2008 financial crisis caused U.S. dollar depreciation.