Indian rupee breaches 72 to the dollar to hit new low

The Indian rupee has fallen nearly 2 percent this month and more than 12 percent this year. (AP)
Updated 06 September 2018
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Indian rupee breaches 72 to the dollar to hit new low

MUMBAI: The Indian rupee breached the 72 to the dollar mark for the first time on Thursday, extending losses as a rout in emerging markets kept investors on edge.
The rupee fell to a record low of 72.11 to the dollar at one point, but pared the day’s losses after mild selling of dollars likely by the Reserve Bank of India, dealers said.
At 0829 GMT, the rupee was trading at 71.9350 to the dollar compared with its previous close of 71.7750.
“This is not intervention, it is just mild selling (of dollars) to smoothen out the volatility and not to protect any level anymore,” said a senior forex analyst at a state-run bank.
The rupee has fallen nearly 2 percent this month and more than 12 percent this year, making it Asia’s worst performing currency.
Dealers estimate the RBI on Thursday to have sold about $1 billion, which they said is not much given the pace of the rupee’s fall.
The RBI anonymously intervenes in the forex market through banks, and publishes its forex reserves numbers with a week’s time lag. Typically, traders can only estimate the intervention number from the weekly data.
While the sharp fall in the rupee and the RBI’s light-handed approach in the forex market have surprised several traders, government officials have not shown much concern about the currency’s rapid depreciation.
Finance Minister Arun Jaitley said late on Wednesday there was no need for a panicked reaction to the rupee’s fall while the commerce secretary, Anup Wadhawan, said the slide was due to global developments and was helping India’s exports, which rose 14.32 percent in July to $25.77 billion from a year earlier.
“It is quite puzzling to the markets what the government and RBI want on the rupee, and why the government is sending out such signals that they are not worried about the rupee,” said a forex trader at a state-run bank.
The next Fibonacci technical level for the rupee will be 72.50-72.80 to the dollar, the forex analyst said.


Davos organizer WEF warns of growing risk of cyberattacks in Gulf

Updated 16 January 2019
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Davos organizer WEF warns of growing risk of cyberattacks in Gulf

  • Critical infrastructure such as power centers and water plants at particular risk, says expert
  • Report finds that unemployment is a major concern in Bahrain, Egypt, Morocco, Oman and Tunisia

LONDON: The World Economic Forum (WEF) has warned of the growing possibility of cyberattacks in the Gulf — with Saudi Arabia, the UAE and Qatar particularly vulnerable.

Cyberattacks were ranked as the second most important risk — after an “energy shock” — in the three Gulf states, according to the WEF’s flagship Global Risks Report 2019.

The report was released ahead of the WEF’s annual forum in Davos, Switzerland, which starts on Tuesday.

In an interview with Arab News, John Drzik, president of global risk and digital at professional services firm Marsh & McLennan said: “The risk of cyberattacks on critical infrastructure such as power centers and water plants is moving up the agenda in the Middle East, and in the Gulf in particular.”

Drzik was speaking on the sidelines of a London summit where WEF unveiled the report, which was compiled in partnership with Marsh and Zurich Insurance.

“Cyberattacks are a growing concern as the regional economy becomes more sophisticated,” he said.

“Critical infrastructure means centers where disablement could affect an entire society — for instance an attack on an electric grid.”

Countries needed to “upgrade to reflect the change in the cyber risk environment,” he added.

The WEF report incorporated the results of a survey taken from about 1,000 experts and decision makers.

The top three risks for the Middle East and Africa as a whole were found to be an energy price shock, unemployment or underemployment, and terrorist attacks.

Worries about an oil price shock were said to be particularly pronounced in countries where government spending was rising, said WEF. This group includes Saudi Arabia, which the IMF estimated in May 2018 had seen its fiscal breakeven price for oil — that is, the price required to balance the national budget — rise to $88 a barrel, 26 percent above the IMF’s October 2017 estimate, and also higher than the country’s medium-term oil-price target of $70–$80.

But that disclosure needed to be balanced with the fact that risk of “fiscal crises” dropped sharply in the WEF survey rankings, from first position last year to fifth in 2018.

The report said: “Oil prices increased substantially between our 2017 and 2018 surveys, from around $50 to $75. This represents a significant fillip for the fiscal position of the region’s oil producers, with the IMF estimating that each $10 increase in oil prices should feed through to an improvement on the fiscal balance of 3 percentage points of GDP.”

At national level, this risk of “unemployment and underemployment” ranked highly in Bahrain, Egypt, Morocco, Oman and Tunisia.
“Unemployment is a pressing issue in the region, particularly for the rapidly expanding young population: Youth unemployment averages around 25 percent and is close to 50 percent in Oman,” said the report.

Other countries attaching high prominence to domestic and regional fractures in the survey were Tunisia, with “profound
social instability” ranked first, and Algeria, where respondents ranked “failure of regional and global governance” first.

Looking at the global picture, WEF warned that weakened international co-operation was damaging the collective will to confront key issues such as climate change and environmental degradation.