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Days after India-Pakistan tensions spilled over into a meeting of the Shanghai Cooperation Organisation (SCO), External Affairs Minister S. Jaishankar and Pakistan Foreign Minister Shah Mehmood Qureshi are expected to meet via a video conference at the South Asian Association for Regional Cooperation (SAARC) meeting on September 24. “All member countries have confirmed participation in the meeting, to be chaired by Pradeep Kumar Gyawali, [1] of Nepal. The respective Foreign Ministers will take part,” sources familiar with preparations for the meeting told The Hindu, referring to the eight members of SAARC, including [2], Bangladesh, [3], India, [4], Nepal, Pakistan and Sri Lanka. A senior Indian official also confirmed that Mr. Jaishankar will attend despite the incident at the SCO virtual meeting of National Security Advisors on Tuesday. During that meeting, National Security Advisor Ajit Doval stormed out after he saw that the Pakistan Special Advisor on National Security Moeed Yusuf had used a map of Pakistan that claimed Indian Territory.
“This was in blatant disregard to the advisory by the host [5] against it and in violation of the norms of the meeting. After consultation with the host, the Indian side left the meeting in protest at that juncture,” the MEA had said about the incident. When asked, the sources said that no specific guidelines on background or maps have been issued by the SAARC Secretariat in Kathmandu that is also the Chair of the SAARC at present, but they hope it would go “smoothly”. A meeting of SAARC Finance Ministers, where an Additional Secretary represented India instead of Finance Minister Nirmala Sitharaman, and Pakistan was represented by its Special Advisor on Finance, took place on Wednesday without incident.
On May 8, India‘s Defence Minister virtually inaugurated a new 80 km-long road in the Himalayas, connecting to the border with China, at the Lipulekh pass. The Nepali government protested immediately, contending that the road crosses territory that it claims and accusing India of changing the status quo without diplomatic consultations. Among the many escalatory moves since then, Nepal deployed police forces to the region, summoned the Indian ambassador in Kathmandu, and initiated a constitutional amendment to formalise and extend its territorial claims over approximately 400 sq km. India, on the other hand, has conveyed its openness to a dialogue but does not seem to share Nepal‘s sense of urgency: its initial statement agreed to a dialogue, but only after the COVID-19 crisis. India has been in effective possession of this territory for at least sixty years, although Nepal claims it conducted a census there in the early 1950s and refers to the 1815 Sugauli Treaty as legitimising its claims. But India‘s new road, up to the Lipulekh pass, is not an unprecedented change in the status quo. India has controlled this territory and built other infrastructure here before, besides conducting its administration and deploying military forces up to the border pass with China. The region is of strategic importance, and the new road is now one of the quickest links between Delhi and the Tibetan plateau. In a 2015 statement, China also recognised India‘s sovereignty by agreeing to expand trade through the Lipulekh pass.
The central bank doesn‘t disclose its foreign exchange management strategy, but it was evident in the last few years that the rupee was not allowed to appreciate despite healthy inflows, resulting in a rapid build-up of foreign exchange. From a low of $275 billion in September of 2013, when rupee came under severe pressure due to so-called 'taper tantrums‘ by the US Federal Reserve, India now has record foreign exchange reserves of [1] billion, as on 21 August — a 95 per cent rise over seven years. Despite the Covid-19 pandemic, the foreign exchange kitty swelled by $62 billion since March. In this seven-year period, rupee ended the year with an appreciation against the dollar only once — in 2017. This year, the rupee is so far down by 2.04 per cent against the dollar. The latest RBI statement suggested that it is not uncomfortable with the appreciation in rupee, confirming the speculation among currency analysts that a departure was made in the exchange management policy.
The Reserve Bank of India (RBI) said that it will conduct liquidity operations worth Rs 20,000 crore in two tranches through sale and purchase of government securities (G-Secs). The two open market operations (OMOs) of Rs 10,000 crore each will be conducted on September 10 and 17, the central bank said in an official release. This is now the second such announcement in as many weeks. Last week, RBI had announced sale and purchase of G Secs worth Rs 20,000 crore, in two tranches, slated to be conducted on August 27 and September 3. In another move, RBI announced the infusion of Rs 1 lakh crore in mid September through long-term repo operations (LTROs) at floating rates, or the prevailing repo rate. Moreover, the central bank also gave an option to lenders who have earlier availed funds through LTROs, to reverse their transactions before maturity.