PARAGRAPH, WORDS AND MEANINGS
TOPIC OF THE DAY –
Rupee rout: on the Indian currency’s slide
India’s macroeconomic threats lie exposed as it grapples with the rupee’s slide. The currency sunkto a closing low of 68.07 against the U.S. dollar on Tuesday, its lowest level in 16 months, before recovering slightly the next day. The rupee, already one of the worst performing Asian currencies, has now weakened 6.2% in 2018. The rise in crude oil prices through this year, amidst rising geopolitical tensions in West Asia and dwindling global supply, have obviously hurt the rupee and the trade balance. Meanwhile, despite a depreciating currency, India’s merchandise exports arestumbling instead of gaining from the opportunity. April clocked a sharp decline in exports from employment-intensive sectors such as readymade garments and gems and jewellery, according to official data. The trade deficit has consequently widened to $13.7 billion in April, compared to $13.25 billion in the same month in 2017. The value of oil and petroleum product imports increased by 41.5% from last year to hit $10.4 billion. U.S. sanctions following Washington’s withdrawal from the Iran nuclear deal and a June 22 meeting of OPEC should drive oil price trends hereon. Oil prices apart, the tightening of U.S. monetary policy has almost always spelled trouble for emerging market economies hooked to Western capital inflows. This time it is no different; capital outflows are scuppering the currencies of many emerging market economies. As the U.S. Federal Reserve has come to adopt a more hawkish stance, investors in search of higher risk-adjusted yields have started to pull money out of emerging markets. Yields on emerging market bonds have risen as investors sold them off aggressively. The yield on the 10-year bond issued by the Indian government has risen to more than 7.8%, from 7.1% in early April. Foreign portfolio investors (FPIs) pulled out ₹15,500 crore from India’s capital markets in April, which is the highest monthly outflow since December 2016. Not surprisingly, about two-thirds of the outflow was attributed to the bond market. The current headwinds from the reversal of capital flows were only to be expected. India is better placed than countries such as Argentina or Turkey. But that’s no reason to becomplacent as external account risks can get out of hand very quickly. A hike in the RBI’s benchmark interest rates could stem the capital exodus, but with core inflation picking up and the government keen on a rate cut as a growth catalyst, the RBI has an unenviable dilemma on its hands. Policymakers, blessed with relatively benign external economic conditions after the taper tantrum of 2013, will have to find means to spur exports — whether by facilitating swifter GST refunds or taking on tariff and non-tariff barriers from the developed world. Efforts to diversifyIndia’s energy basket also need greater stress.
WORDS AND MEANINGS –
1) Grapples
Meaning: Struggle to deal with or overcome (a difficulty or challenge).
Example: “other towns are still grappling with the problem”
Synonyms: Tackle, Confront
Antonyms: Avoid
2) Sunk
Meaning: Gradually decrease or decline in value, amount, quality, or intensity.
Example: “their output sank to a third of the pre-war figure”
Synonyms: Fall, Drop
Antonyms: Rise
3) Dwindling
Meaning: Diminish gradually in size, amount, or strength.
Example: “traffic has dwindled to a trickle”
Synonyms: Diminish, Decrease
Antonyms: Increase, Flourish
4) Depreciating
Meaning: Diminish in value over a period of time.
Example: “the latest cars will depreciate heavily in the first year”
Synonyms: Devalue, Cheapen
Antonyms: Appreciate
5) Stumbling
Meaning: Trip or momentarily lose one’s balance; almost fall.
Example: “her foot caught in the rug and she stumbled”
Synonyms: Fall, Loss balance
6) Intensive
Meaning: Concentrated on a single subject or into a short time; very thorough or vigorous.
Example: “she undertook an intensive Arabic course”
Synonyms: Thorough, Rigorous
Antonyms: Superficial, Partial
7) Tightening
Meaning: Make or become tight or tighter.
Example: “he tightened up the clips”
Synonyms: Secure, Strengthen
Antonyms: Loosen, Slacken
8) Spelled trouble
Meaning: To suggest that there may be problems in the future:
Example: The latest opinion polls spell trouble for the Republicans.
Synonyms: Causing difficulties
9) Hooked
Meaning: Attach or fasten with a hook or hooks.
Example: “the truck had a red lamp hooked to its tailgate”
Synonyms: Fasten, Secure
Antonyms: Unhitch
10) Scuppering
Meaning: Prevent from working or succeeding; thwart.
Example: “plans for a bypass were scuppered by a public inquiry”
Synonyms: Wreck, Destroy
Antonyms: Further, Promote
11) Hawkish
Meaning: Advocating an aggressive or warlike policy, especially in foreign affairs.
Example: “the administration’s hawkish stance”
12) Aggressively
Meaning: In a determined and forceful way.
Example: “foreign-owned banks are aggressively marketing credit cards”
13) Pulled out
Meaning: To stop being involved in an activity:
Example: Lack of funding leaves us with no choice but to pull out.
14) Headwinds
Meaning: A wind blowing in the opposite direction to the one you are moving in
Example: The runners had to battle against a stiff/strong headwind.
15) Complacent
Meaning: Showing smug or uncritical satisfaction with oneself or one’s achievements.
Example: “you can’t afford to be complacent about security”
Synonyms: Smug, Satisfied
Antonyms: Dissatisfied, Humble
16) Stem
Meaning: Originate in or be caused by.
Example: “many of the universities’ problems stem from rapid expansion”
17) Exodus
Meaning: A mass departure of people.
Example: “the annual exodus of sun-seeking Canadians to Florida”
Synonyms: Withdrawal, Evacuation
Antonyms: Arrival
18) Picking up
Meaning: To increase or improve.
Example: The truck picked up speed slowly.
19) Catalyst
Meaning: a person or thing that precipitates an event.
Example: “the prime minister’s speech acted as a catalyst for debate”
20) Unenviable
Meaning: Difficult, undesirable, or unpleasant.
Example: “an unenviable reputation for drunkenness”
Synonyms: Disagreeable, Unpleasant
Antonyms: Enviable, Desirable
21) Dilemma
Meaning: A difficult situation or problem.
Example: “the insoluble dilemma of adolescence”
Synonyms: Difficulty, Quandary
22) Benign
Meaning: Gentle and kind.
Example: “his benign but firm manner”
Synonyms: Kind, Friendly
Antonyms: Unfriendly, Hostile
23) Taper tantrum
Meaning: Taper tantrum is the term used for the 2013 surge in U.S. Treasury yields, which resulted from the Federal Reserve’s use of tapering to gradually reduce the amount of money it was feeding into the economy.
24) Spur
Meaning: Promote the development of; stimulate.
Example: “governments cut interest rates to spur demand”
Synonyms: Stimulate, Induce
25) Diversify
Meaning: (of a company) enlarge or vary its range of products or field of operation.
Example: “the company expanded rapidly and diversified into computers”
Synonyms: Expand, Change
