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Avoid ‘beggar-thy-neighbour’ policies: Raghuram Rajan

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Rajan

RBI Governor Raghuram Rajan has said there is need to avoid beggar-thy-neighbour policies and sustained exchange-rate intervention that primarily induce capital outflows and competitive currency devaluations.

According to Rajan, multilateral institutions like the International Monetary Fund should exercise their responsibility for maintaining the stability of the global system by analysing and passing careful judgement on each unconventional monetary policy (including sustained exchange-rate intervention).

China on Thursday lowered the Yuan’s central rate against the US dollar by 0.51 per cent to 6.5646, the lowest since March 2011. A lower currency would make Chinese exports cheaper and more competitive in the global markets.
Indian capital markets on Thursday joined the global sell-off sparked by China growth concerns. The rupee also fell to more than a three-week low of 66.93.

“In an ideal world, the political imperative for growth would not outstrip an economy’s potential. In the real world, where social-security commitments, over-indebtedness, and poverty will not disappear, we need ways to achieve sustainable growth.

“Above all, we need to avoid beggar-thy-neighbour policies, such as unconventional monetary policy or sustained exchange-rate intervention, that primarily induce capital outflows and competitive currency devaluations,” he said in an article in ‘Project Syndicate’.

“The current non-system is pushing the world toward competitive monetary easing, to no one’s ultimate benefit. Developing a consensus for free trade and responsible global citizenship – and thus resisting parochial pressures – would set the stage for the sustainable growth the world desperately needs,” he said.

Rajan said that developed countries have just one other channel for growth– boosting exports by depreciating the exchange rate through aggressive monetary policy.

“Ideally, emerging-market countries, funded by the developed economies, would absorb these exports while investing for their future, thereby bolstering global aggregate demand,” he said.

He said that “these countries’ lesson” from the emerging-market crises of the 1990s was that reliance on foreign capital to fund the imports needed for investment is dangerous.

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Air India operates international charter, cargo flights

Besides, the flag carrier on Saturday commenced the first cargo flight between Shanghai and Delhi.

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Air India Flight

New Delhi, April 4 : National passenger carrier Air India on Saturday mobilised massive resources to operate international charter and cargo flights.

Accordingly, the airline repatriated stranded foreigners from India and also brought back critical medical cargo from Shanghai.

“All these flights are being operated adhering to all safety protocols laid down by the DGCA,” the airline said in a statement.

The airline is scheduled to operate 18 charter flights to fly back German, French, Irish and Canadian nationals stranded in India amid the nationwide lockdown, as requested by their respected embassies.

“While the Germans and French will be flown to Frankfurt and Paris, the other two nationalities will be taken to Heathrow in London from where Canada and Ireland (governments) would be making further travel arrangements for them,” the statement said.

“These chartered flights started from March 31 with German nationals flying to Frankfurt. Earlier, AI had ferried Israeli nationals to Tel Aviv as well in a chartered flight,” it added.

On Saturday, flights to London and Paris were being operated.

Besides, the flag carrier on Saturday commenced the first cargo flight between Shanghai and Delhi.

“A charter cargo flight was also operated between Delhi and Shanghai today to fly in vital medical cargo from China to India,” the statement said.

“Air India is also scheduled to operate some more cargo flights between Delhi and Shanghai till April 9. These flights will bring critical medical equipment to India,” it added.

The airline will also be operating cargo flights to Hong Kong.

On the domestic front, the Air India Group has been transporting essential cargo throughout the country. The airline has operated 79 cargo flights between March 26 and April 3.

The flights, being operated regularly between the metro hubs — Delhi, Mumbai, Bengaluru, Kolkata, Hyderabad and Chennai — to the remote destinations of northeast and other far-flung areas of the country, are carrying medical equipment and other essential items.

Furthermore, the airline has been instrumental in rescuing stranded Indians, mainly students and pilgrims, from China, Japan and Europe.

Lauding Air India’s continued efforts in repatriating stranded foreigners, Amber Dubey, Joint Secretary at the Ministry of Civil Aviation, said in a recent LinkedIn post: “Heard from a senior Air India pilot who commanded the special flight from Mumbai to Frankfurt today that every ATC they crossed said ‘Really proud of u guys’.”

“This was a special Air India flight that flew out stranded European and Canadian citizens from Mumbai. All crew members including the pilots wore the mandatory Covid-19 coveralls for over 20 hours at a stretch (to/fro and ground time at Frankfurt). They will now remain in self-quarantine for 14 days,” he added.

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Aditya Birla Group to donate Rs 500 cr to fight COVID-19

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coronavirus cases

Mumbai, April 3 (IANS) Aditya Birla Group on Friday said that it is committed to contribute Rs 500 crore to various COVID-19 relief measures.

Accordingly, the Group is committed to contribute Rs 400 crores to the PM-CARES Fund, while it has already provided a grant of Rs 50 crore to FICCI-Aditya Birla CSR Centre for Excellence for COVID-19 relief measures.

The group has also allocated Rs 50 crore towards supply of one million N95 masks, 280,000 personal protective equipment (PPE), as well as ventilators.

“Commenced production of one million triple layer surgical masks and one lakh overall garments with the support of the Textiles Ministry,” the group said in a statement.

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US economy to decline by 7% in Q2: Report

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Economy

Washington, April 3 : The US Congressional Budget Office (CBO) has estimated that the country’s GDP will decline by more than 7 per cent in the second quarter due to the coronavirus pandemic, its said in a report.

If that happened, the decline in the annualized growth rate reported by the Bureau of Economic Analysis would be about four times larger and would exceed 28 per cent, Xinhua news agency quoted the CBO as saying in the report on Thursday.

The unemployment rate was also expected to exceed 10 per cent during the second quarter, the CBO said, in part reflecting the 3.3 million unemployment insurance claims reported last week and the 6.6 million new claims reported earlier on Thursday.

The newly released number of weekly claims was about 10 times larger than it had been in any single week during the recession from 2007 to 2009, the CBO noted.

As the novel coronavirus continues to sweep across the country, some 40 states have ordered residents to stay at home unless necessary, including the hardest-hit New York, New Jersey, Michigan, California, and Louisiana.

Non-essential businesses, such as theatres, museums, gyms, and shopping malls were largely shutdown, and restaurants and bars asked to close to in-person dining, effectively paralyzing the consumption-driven US economy.

The CBO report also noted that interest rates on 10-year Treasury notes were expected to be below 1 percent during the second quarter as a result of the Federal Reserve’s actions and market conditions.

CBO’s economic projections, especially for later periods, were highly uncertain at this time, it added.

The US currently has the highest number of cases in the world at 245,213, with 5,983 fatalities.

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