Question:
Read the following passage and answer the question
On Monday, the Indian rupee fell to an all-time low of 77.6 against the dollar during intraday. While it has pulled back marginally since then, the rupee has, of late, been exhibiting signs of weakness. However, the Indian currency is not an outlier. Currencies of most other emerging economies have also exhibited weakness against the dollar. In fact, of late, the Turkish lira, Malaysian ringgit and Thai bhat have declined more sharply than the rupee according to analysts at Bank of Baroda. Notwithstanding these day-to-day fluctuations, the outlook for the Indian rupee continues to be weighed down by tighter global monetary policy, a strengthening of the US dollar and risk aversion, and higher current account deficits. With the US Federal Reserve hiking rates by 50 basis points, there has been a sell-off in global markets as investors have rushed to the dollar. In India, foreign portfolio investors have pulled out around $5.8 billion since the beginning of this financial year as per data from Kotak, exerting downward pressure on the currency. The DXY index - which measures the US dollar against six major currencies, namely the euro, pound, Canadian dollar, yen, Swedish kroner and Swiss franc has been rising. This strengthening of the dollar is unlikely to be reversed in the near term. As the US Fed embarks on an aggressive tightening of rates - some analysts are factoring in a terminal rate of more than 3 per cent asset classes across the world will witness further adjustments. There is also the pressure owing to the rising trade deficit — in April the deficit stood at $20 billion, up from $18.7 billion in March. In fact, according to analysts, the current account deficit is likely to be at its highest level since the crisis of 2013. During this period, the Reserve Bank of India (RBI) has been intervening to soften the currency's slide the fall in its foreign exchange reserves suggests that is the case. However, considering that the rupee is overvalued, the central bank should allow the currency to slide, allowing it to find its own level, intervening only to smoothen excess volatility. Currency depreciation will act as an automatic stabiliser. It will help ease current account pressures by curbing imports, but more importantly, it will help boost exports—a critical driver of the country's economy at the current juncture.
Currencies globally in depreciation mode due to......
Read the following passage and answer the question
On Monday, the Indian rupee fell to an all-time low of 77.6 against the dollar during intraday. While it has pulled back marginally since then, the rupee has, of late, been exhibiting signs of weakness. However, the Indian currency is not an outlier. Currencies of most other emerging economies have also exhibited weakness against the dollar. In fact, of late, the Turkish lira, Malaysian ringgit and Thai bhat have declined more sharply than the rupee according to analysts at Bank of Baroda. Notwithstanding these day-to-day fluctuations, the outlook for the Indian rupee continues to be weighed down by tighter global monetary policy, a strengthening of the US dollar and risk aversion, and higher current account deficits. With the US Federal Reserve hiking rates by 50 basis points, there has been a sell-off in global markets as investors have rushed to the dollar. In India, foreign portfolio investors have pulled out around $5.8 billion since the beginning of this financial year as per data from Kotak, exerting downward pressure on the currency. The DXY index - which measures the US dollar against six major currencies, namely the euro, pound, Canadian dollar, yen, Swedish kroner and Swiss franc has been rising. This strengthening of the dollar is unlikely to be reversed in the near term. As the US Fed embarks on an aggressive tightening of rates - some analysts are factoring in a terminal rate of more than 3 per cent asset classes across the world will witness further adjustments. There is also the pressure owing to the rising trade deficit — in April the deficit stood at $20 billion, up from $18.7 billion in March. In fact, according to analysts, the current account deficit is likely to be at its highest level since the crisis of 2013. During this period, the Reserve Bank of India (RBI) has been intervening to soften the currency's slide the fall in its foreign exchange reserves suggests that is the case. However, considering that the rupee is overvalued, the central bank should allow the currency to slide, allowing it to find its own level, intervening only to smoothen excess volatility. Currency depreciation will act as an automatic stabiliser. It will help ease current account pressures by curbing imports, but more importantly, it will help boost exports—a critical driver of the country's economy at the current juncture.
Currencies globally in depreciation mode due to......
On Monday, the Indian rupee fell to an all-time low of 77.6 against the dollar during intraday. While it has pulled back marginally since then, the rupee has, of late, been exhibiting signs of weakness. However, the Indian currency is not an outlier. Currencies of most other emerging economies have also exhibited weakness against the dollar. In fact, of late, the Turkish lira, Malaysian ringgit and Thai bhat have declined more sharply than the rupee according to analysts at Bank of Baroda. Notwithstanding these day-to-day fluctuations, the outlook for the Indian rupee continues to be weighed down by tighter global monetary policy, a strengthening of the US dollar and risk aversion, and higher current account deficits. With the US Federal Reserve hiking rates by 50 basis points, there has been a sell-off in global markets as investors have rushed to the dollar. In India, foreign portfolio investors have pulled out around $5.8 billion since the beginning of this financial year as per data from Kotak, exerting downward pressure on the currency. The DXY index - which measures the US dollar against six major currencies, namely the euro, pound, Canadian dollar, yen, Swedish kroner and Swiss franc has been rising. This strengthening of the dollar is unlikely to be reversed in the near term. As the US Fed embarks on an aggressive tightening of rates - some analysts are factoring in a terminal rate of more than 3 per cent asset classes across the world will witness further adjustments. There is also the pressure owing to the rising trade deficit — in April the deficit stood at $20 billion, up from $18.7 billion in March. In fact, according to analysts, the current account deficit is likely to be at its highest level since the crisis of 2013. During this period, the Reserve Bank of India (RBI) has been intervening to soften the currency's slide the fall in its foreign exchange reserves suggests that is the case. However, considering that the rupee is overvalued, the central bank should allow the currency to slide, allowing it to find its own level, intervening only to smoothen excess volatility. Currency depreciation will act as an automatic stabiliser. It will help ease current account pressures by curbing imports, but more importantly, it will help boost exports—a critical driver of the country's economy at the current juncture.
Currencies globally in depreciation mode due to......
Updated On: Oct 17, 2024
- Trade deficits
- Stagflation
- Fiscal deficit
- Quantitative tightening by Federal Reserve
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The Correct Option is D
Solution and Explanation
The correct option is (D):Quantitative tightening by Federal Reserve
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Top Questions on Reading Comprehension
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THE FAIR ISLE METHOD: Fair Isle knitting is a traditional technique that involves using two or more colours of yarn in a single row to create intricate patterns and designs. This method requires careful tension management to ensure even stitches and prevent puckering. To begin, select your colours and cast on the desired number of stitches. As you knit, alternate between colours every few stitches, carrying the unused yarn along the back of the work. Mastering the Fair Isle technique allows you to create stunning visual effects in garments, accessories, and home textiles.
THE CONTINENTAL STYLE: The Continental knitting style, often referred to as “picking,” involves holding the yarn in the left hand while the right hand manipulates the needles. This method allows for greater speed and efficiency, particularly when working with complex patterns or multiple colours. To practice this style, start by casting on your stitches and using your left hand to tension the yarn. With each stitch, simply “pick” the yarn with your right needle, forming a quick and fluid motion. As you become comfortable with this technique, you may find that your overall knitting speed and comfort improve significantly.
THE SHORT-ROW TECHNIQUE: Short-row knitting is an advanced technique that allows for the creation of shaped garments, such as sleeves and shoulders, without the need for complex shaping. To make a sleeve using this technique, begin by casting on the required number of stitches. Work a portion of the row, then turn your work and return without completing the full row to create the “short rows” that shape the curves of the sleeve. To prevent holes at the turn, wrap the stitch before you turn your work. Repeat this process as needed to achieve the desired shaping and dimension of the sleeve. Once you have shaped the sleeve, you can then sew the side seams to connect the pieces of your garment and finally, complete the edges to ensure a clean finish. This method not only helps shape curves but also adds dimension to your piece, allowing you to enhance fit and style.- AILET BALLB (Hons.) - 2025
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The Story of Coffee
Coffee, a beloved beverage enjoyed by millions around the globe, has a rich and captivating history that spans centuries. The story of coffee begins in the ancient highlands of Ethiopia, where, according to legend, a goat herder named Kaldi discovered the stimulating effects of coffee beans. One day, Kaldi noticed his goats frolicking with unusual energy after eating red berries from a certain tree. Curious, he tried the berries himself and experienced a newfound alertness. This discovery soon spread to monasteries, where monks used it to stay awake during long hours of prayer. From Ethiopia, coffee cultivation and consumption spread to the Arabian Peninsula, particularly in Yemen, where the practice of roasting coffee beans and brewing the drink began to take shape. By the 15th century, coffee had become a popular beverage in the Islamic world, with coffee houses known as ‘qahveh khaneh’ emerging as social hubs for conversation, music, and intellectual exchange. These coffee houses became centers of culture and commerce, influencing the spread of coffee to Turkey and beyond, eventually reaching Europe. In Europe, coffee initially faced resistance from religious authorities who considered it a ‘Muslim drink’ and tried to ban it. However, its popularity persisted, and by the 17th century, coffee houses had sprung up in major European cities, becoming important gathering places for artists, writers, and thinkers. The stimulating effects of coffee were embraced during the Age of Enlightenment, where it was seen as a catalyst for intellectual discussion and innovation. The journey of coffee continued with the establishment of colonial plantations in tropical regions such as the Caribbean, Central and South America, and Southeast Asia. These plantations fuelled the global demand for coffee, transforming it from a regional specialty to a major commodity. The industrial revolution further accelerated coffee production and consumption, leading to innovations in coffee brewing methods and the development of instant coffee. In the modern era, coffee has evolved into a deeply ingrained part of daily life for people worldwide. Its cultural significance spans from the bustling cafes of Paris to the quiet coffee farms of Colombia. Today, coffee remains not only a popular beverage but also a symbol of social interaction, productivity, and enjoyment. Whether sipped slowly over a conversation with friends or grabbed hastily on the way to work, the story of coffee continues to unfold, intertwining with the histories and cultures of countless societies across the globe.- AILET BALLB (Hons.) - 2025
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The intricate world of modern manufacturing is a web of precision and innovation, where even the tiniest components play a pivotal role. One such element, often overlooked but crucial, is the sub-subpart. Whether it’s a carpenter fashioning a bespoke piece of furniture or an automobile engineer designing the next generation of vehicles, the creation of sub-subparts is a fundamental process that demands meticulous craftsmanship and cutting-edge technology. In the realm of woodworking, carpenters frequently work with sub-subparts like dowels, screws, and hinges. These minute components may appear insignificant, yet they determine the structural integrity and functionality of the final product. Crafting a dowel, for instance, begins with selecting the appropriate wood species, followed by precision cutting and shaping. The result is a perfectly cylindrical, sturdy sub-subpart that seamlessly joins two larger pieces of wood. The advent of computer-aided design (CAD) and computer numerical control (CNC) machines has revolutionised this process, enabling carpenters to create sub-subparts with unparalleled precision.
Similarly, in the automobile industry, sub-subparts are the unsung heroes of vehicle construction. Take, for instance, the ball bearing—a minuscule but essential component in the wheels and transmission system. Manufacturing these precision-engineered spheres involves intricate processes like forging, heat treatment, and precision machining. Modern techniques such as laser cutting and 3D printing have streamlined production, ensuring that these sub-subparts meet the demanding standards of the automotive sector. The manufacturing of sub-subparts is a testament to the convergence of traditional craftsmanship and cutting-edge technology. Whether it’s a carpenter’s workshop or a high-tech automotive assembly line, the quest for perfection in sub-subpart creation remains unwavering. The attention to detail and precision required in these processes is a testament to the dedication of craftsmen and engineers alike.
To conclude, while sub-subparts may be small in size, their significance in various industries cannot be overstated. Whether it’s a carpenter working on a timeless piece of furniture or an automotive engineer striving for superior performance, the manufacturing of sub-subparts is a crucial step towards achieving excellence in craftsmanship and technology. This fusion of tradition and innovation accentuates the essence of modern manufacturing.- AILET BALLB (Hons.) - 2025
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