Hindi English Translation || Editorial || Currency pressure: On the rupee’s depreciation against the dollar

Currency pressure: On the rupee’s depreciation against the dollar

The Reserve Bank of India will have to ensure price stability (मूल्य स्थिरता) and prevent further weakening of the rupee

The rupee is yet again facing renewed pressure, along with major peers (समकक्ष, बराबर), as the dollar continues to strengthen in the wake of the Federal Reserve’s (the central banking system of the United States (The Reserve Bank of India (RBI) is India’s central banking institution)) latest jumbo (very large) 75 basis points (बुनियादी निर्देश) interest rate increase and the U.S. central bank’s (केंद्रीय अधिकोष) unequivocal (स्पष्ट, असंदिग्ध, निर्विवाद) message that it remains squarely (precisely, exactly, just, directly) focused on taming (नियंत्रण, अनुकूल बनाना, अंकुश) inflation (मुद्रा स्फ़ीति). The Indian currency weakened past the 81-mark against the dollar for the first time ever in Friday’s intraday (occurring in a single day (within the day)) trade, before ending the week at a new record closing low. The rupee’s slide (decline, fall, drop, descend (in quality to a lower level)) was softened (नरम करना, कम करना) by the Reserve Bank of India’s intervention (हस्तक्षेप) to smoothen (समतल बनाएं) volatility (अस्थिरता, अप्रत्याशितता); the cumulative (संचयी, जुड़ने वाला) impact of such interventions over the 12 months through September 16 have shrunk the RBI’s war chest (fund/money reserved aside to be used in a challenging/dangerous situation (e.g. war. campaign, etc.)) of foreign exchange reserves (विदेशी मुद्रा भंडार) by almost $94 billion to $545.65 billion. The fact that the rupee is not alone in depreciating (मूल्य कम करना, गिरावट / हानि) against the dollar can be of little comfort to Indian companies reliant (dependent on) on imports of raw materials or services for the smooth functioning of their businesses. They are struggling to contend with (deal with, cope with, face, grapple with (a difficult or unpleasant situation)) rising costs at a time when domestic demand is still to regain a durable (long-lasting, long-term, strong, substantial) post-pandemic footing (stability, equilibrium, steadiness, balance, evenness, composure ;standing, status, position). The higher import bill is also bound to (sure, likely, guaranteed) add inflationary pressures to an economy already beset (trouble, bother, worry, anguish, embarrass (persistently)) by persistently (continuously) elevated inflation and further complicates monetary policymakers’ efforts to rein in the price gains (a general increase in the price of something).

The rupee’s more than 8% depreciation (devaluation, decrease in value) against the dollar so far in 2022, with almost all of the weakening having occurred in the wake of (as a result of some event, especially an unpleasant one; in the aftermath of, as a consequence of, on account of, because of, owing to) Russia’s invasion of Ukraine on February 24, has also largely offset (even up, counterbalance, equalize, neutralize; make amends for, compensate for) whatever gains that may accrue (to receive something gradually over a period of time; accumulate, gather, build up, be added) from the fact that the price of the Indian basket of crude oil (the raw natural resource that is extracted from the earth and refined into products such as gasoline, jet fuel, diesel and other petroleum products) has now retreated (recede, fall ,go down; decrease, reduce) substantially and is close to its pre-war levels. Overseas portfolio investors too have once again turned net sellers of Indian stocks and debt (liability, financial obligation, borrowed capital) in the last two sessions after having resumed (restart, start again, recommence, take up again, renew) their purchases of local assets in August and for most of this month. As a result, so far in 2022, FPIs have in total dumped (put down, deposit) $20.6 billion of Indian equity (share/stock Market) and debt following three straight years of net investments. And the Fed’s projection (forecast, prediction, calculation) of further steep (sudden, sharp, rapid) monetary tightening (make stricter, make more rigorous, make more stringent), of at least another 125 basis points, is only likely to lead to (result in, cause, bring on, bring about, give rise to) more outflows over the last quarter of this year. With the rupee’s real effective exchange rate (REER) (REER is the real effective exchange rate (a measure of the value of a currency against a weighted average of several foreign currencies) divided by a price deflator or index of costs), or trade-weighted average of its value, also signalling that the Indian currency is still overvalued (fix the value of a currency at too high a level), the RBI’s rate setting panel will have a fine tightrope to walk next week as it battles to restore a semblance ((outward) appearance, approximation; similarity, likeness, resemblance, equivalence) of price stability without choking (suffocate, stifle, suppress, smother, restrain) growth and by ensuring the rupee does not weaken too sharply.

Courtesy: The Hindu

Important Word List With Meaning

1.currency depreciation (noun)

Hindi Meaning - मुद्रा मूल्यह्रास
English Meaning - it is the loss of value of a country’s currency with respect to one or more foreign reference currencies, typically in a floating exchange rate system in which no official currency value is maintained.

2.price stability (noun)

Hindi Meaning - मूल्य स्थिरता
English Meaning - no (drastic) change in the price of goods and services in an economy over a period of time. It implies avoiding both prolonged inflation and deflation.

3.peer (noun)

Hindi Meaning - समकक्ष, बराबर
English Meaning - equal.

4.basis point (BPS) (noun)

Hindi Meaning - बुनियादी निर्देश
English Meaning - a unit of measure used in finance to describe the percentage change in the value or rate of a financial instrument. One basis point is equivalent to 0.01% (1/100th of a percent). Used for measuring change in interest rate/yield.

5.central bank (noun)

Hindi Meaning - केंद्रीय अधिकोष
English Meaning - the banking regulator of a county’s banking system. (e.g. The Reserve Bank of India (RBI) is the central bank of India).

6.unequivocal (adjective)

Hindi Meaning - स्पष्ट, असंदिग्ध, निर्विवाद
English Meaning - unambiguous, unmistakable, indisputable, incontrovertible, indubitable, undeniable; clear, crystal clear, well defined, explicit, categorical, outright, certain, decisive, absolute.

7.tame (verb)

Hindi Meaning - नियंत्रण, अनुकूल बनाना, अंकुश
English Meaning - curb, control, moderate, mitigate. reduce, lessen.

8.inflation (noun)

Hindi Meaning - मुद्रा स्फ़ीति
English Meaning - simply meaning “cost of living”; increase of price level of goods & services and vice versa decrease of currency value.

9.soften (verb)

Hindi Meaning - नरम करना, कम करना
English Meaning - decrease, reduce, lessen, moderate.

10.intervention (noun)

Hindi Meaning - हस्तक्षेप
English Meaning - the process of intervening in something; involvement, interference.

11.smoothen (verb)

Hindi Meaning - समतल बनाएं
English Meaning - deal successfully with (a problem/difficulty).

12.volatility (noun)

Hindi Meaning - अस्थिरता, अप्रत्याशितता
English Meaning - unpredictability, instability, unreliability.

13.cumulative (adjective)

Hindi Meaning - संचयी, जुड़ने वाला
English Meaning - total, collective, aggregate.

14.foreign exchange reserves (noun)

Hindi Meaning - विदेशी मुद्रा भंडार
English Meaning - foreign exchange reserves are the amounts of assets /money in foreign currencies that a country has in its central bank (in India, it is Reserve bank of India).

15.depreciate (verb)

Hindi Meaning - मूल्य कम करना, गिरावट / हानि
English Meaning - decrease, decline, drop/lose value.

16.depreciation (noun)

English Meaning - devaluation, decrease in value.

17.in the wake of (phrase)

English Meaning - as a result of some event, especially an unpleasant one; in the aftermath of, as a consequence of, on account of, because of, owing to.

18.Federal Reserve (US) (noun)

English Meaning - the central banking system of the United States (The Reserve Bank of India (RBI) is India’s central banking institution).

19.jumbo (adjective)

English Meaning - very large.

20.squarely (adverb)

English Meaning - precisely, exactly, just, directly.

21.intraday (adjective)

English Meaning - occurring in a single day (within the day).

22.slide (noun)

English Meaning - decline, fall, drop, descend (in quality to a lower level).

23.shrunk past participle of shrink (verb)

English Meaning - lessen, reduce, decrease.

24.war chest (noun)

English Meaning - fund/money reserved aside to be used in a challenging/dangerous situation (e.g. war. campaign, etc.).

25.reliant (adjective)

English Meaning - dependent on.

26.contend with (phrasal verb)

English Meaning - deal with, cope with, face, grapple with (a difficult or unpleasant situation).

27.durable (adjective)

English Meaning - long-lasting, long-term, strong, substantial.

28.footing (noun)

English Meaning - stability, equilibrium, steadiness, balance, evenness, composure ;standing, status, position.

29.bound to (adjective)

English Meaning - sure, likely, guaranteed.

30.Inflationary/price pressures (noun)

English Meaning - the demand and supply-side pressures that can cause a rise in the general price level; cost-push inflation, hot-economy, deficit finance.

31.beset (verb)

English Meaning - trouble, bother, worry, anguish, embarrass (persistently).

32.persistently (adverb)

English Meaning - continuously.

33.elevated (adjective)

English Meaning - increased, raised.

34.monetary policy (noun)

English Meaning - monetary policy refers to the use of monetary instruments under the control of the central bank to regulate magnitudes such as interest rates, money supply, and availability of credit with a view to achieving the ultimate objective of economic policy mentioned in the Reserve Bank of India Act, 1934.

35.The monetary policy committee (MPC) (noun)

English Meaning - it is a six-member panel that is expected to bring “value and transparency” to rate-setting decisions. It will feature three members from the RBI — the Governor, a Deputy Governor and another official — and three independent members to be selected by the Government. The MPC will meet four times a year to decide on monetary policy by a majority vote.

36.rein in (phrasal verb)

English Meaning - to control, restrain, restrict, limit someone/something.

37.price gain (noun)

English Meaning - a general increase in the price of something.

38.invasion (noun)

English Meaning - attack, offensive, onslaught, incursion, assault.

39.offset (verb)

English Meaning - even up, counterbalance, equalize, neutralize; make amends for, compensate for.

40.accrue (verb)

English Meaning - to receive something gradually over a period of time; accumulate, gather, build up, be added.

41.Indian Basket (IB) (or) Indian Crude Basket (noun)

English Meaning - The Indian crude oil basket is derived from sour grade (Oman and Dubai average) and sweet grade (Brent) of crude oil processed at Indian refineries in the ratio of 75.50:24.50. It is used for the purpose of macro-economic calculations as petroleum product prices are linked to their own market.

42.crude oil (noun)

English Meaning - the raw natural resource that is extracted from the earth and refined into products such as gasoline, jet fuel, diesel and other petroleum products.

43.retreat (verb)

English Meaning - recede, fall ,go down; decrease, reduce.

44.debt (noun)

English Meaning - liability, financial obligation, borrowed capital.

45.resume (verb)

English Meaning - restart, start again, recommence, take up again, renew.

46.foreign portfolio investments (FPIs) (noun)

English Meaning - investments in financial assets, such as shares, government bonds, corporate bonds, convertible securities, infrastructure securities etc in a foreign country.

47.dump (verb)

English Meaning - put down, deposit.

48.equity (market) (noun)

English Meaning - share/stock Market.

49.projection (noun)

English Meaning - forecast, prediction, calculation.

50.steep (adjective)

English Meaning - sudden, sharp, rapid.

51.tighten (verb)

English Meaning - make stricter, make more rigorous, make more stringent.

52.tightening (noun)

English Meaning - an act of making something stricter/rigorous.

53.lead to (verb)

English Meaning - result in, cause, bring on, bring about, give rise to.

54.capital inflow (noun)

English Meaning - a steady movement of capital (amount) into a place, economy, activity etc.

55.capital outflow (noun)

English Meaning - money/assets flowing out of (or leaving) a particular country’s economy.

56.real effective exchange rate (REER) (noun)

English Meaning - REER is the real effective exchange rate (a measure of the value of a currency against a weighted average of several foreign currencies) divided by a price deflator or index of costs.

57.be weighted (verb)

English Meaning - be planned or arranged in order to put a particular thing/factor in an advantageous or disadvantageous position.

58.weighted average (noun)

English Meaning - the average of a data set that recognizes certain numbers as more important than others.

59.overvalue (verb)

English Meaning - fix the value of a currency at too high a level.

60.walk/balance on a tightrope (phrase)

English Meaning - to deal with a difficult situation in which a very small error could have very bad outcomes.

61.semblance (noun)

English Meaning - (outward) appearance, approximation; similarity, likeness, resemblance, equivalence.

62.choke (verb)

English Meaning - suffocate, stifle, suppress, smother, restrain.