Rupee’s Struggle Intensifies: Closes at Record Low Against Dollar

The rupee has once again faced a tough trading session, sliding to a new record low against the dollar for the third consecutive day. On Thursday, it ended at 85.26, a decline of six paise from its previous close. The currency also touched an all-time intraday low of 85.28, as strong dollar demand overshadowed sellers in year-end trading activities.

“The rupee weakened marginally due to the dollar index maintaining elevated levels near 108. Foreign institutional investors continued to exhibit caution, refraining from long positions in Indian markets. This restrained the rupee’s attempts to stabilize,” noted Jateen Trivedi, VP (research analyst) at LKP Securities.

In the near term, the rupee is expected to trade within a narrow range of 85 to 85.45 as it battles multiple headwinds. Market participants anticipate a challenging road ahead, with the rupee striving to regain lost ground amid global and domestic economic uncertainties.

Real Effective Exchange Rate Sparks Overvaluation Concerns

Adding to the challenges, the Reserve Bank of India’s (RBI) Bulletin highlighted that the real effective exchange rate (REER) had surged to a multi-year high of 108.14, sparking fears of overvaluation. The REER measures the rupee’s value against a basket of currencies, factoring in inflation differentials.

Dealers attribute the rupee’s decline to global economic turbulence and domestic macroeconomic struggles. Despite RBI’s periodic interventions to support the currency, the rupee remains vulnerable to sustained dollar strength and tightening global financial conditions.

The dollar has consistently gained strength against the rupee over the last two months. This rise is fueled by increasing US bond yields and expectations of slower-than-anticipated Federal Reserve interest rate cuts in 2025. These factors continue to make the dollar an attractive option for global investors, further weighing down the rupee.

On Thursday, India’s equity markets exhibited stability, with the Sensex closing nearly flat at 78,472 points, while the Nifty edged slightly higher to 23,750. However, the subdued market sentiment reflects broader concerns over currency volatility and economic uncertainty.

Outlook for the Rupee

The rupee’s journey ahead appears fraught with challenges as it attempts to navigate a complex economic landscape. Global factors such as rising dollar demand and tightening monetary policies, coupled with domestic issues like inflation and fiscal concerns, are likely to test its resilience. While the RBI’s interventions may offer some relief, experts suggest the rupee may face further depreciation before finding a stable footing.

As the year winds down, traders and investors remain watchful, anticipating further developments that could impact the rupee-dollar equation in the coming months.

RBI Establishes FREE-AI Panel to Champion Ethical AI in Finance

In a significant move toward ethical Artificial Intelligence (AI) adoption, the Reserve Bank of India (RBI) has formed a dedicated panel to shape the future of responsible AI usage in the financial sector. Known as the Framework for Responsible and Ethical Enablement of Artificial Intelligence (FREE-AI), this committee is expected to spearhead critical developments in the domain.

A Focus on Ethical AI in Finance

The FREE-AI panel will be chaired by Pushpak Bhattacharyya, a renowned expert from IIT Bombay, bringing academic rigor to this pivotal initiative. Alongside him, the committee includes a diverse group of professionals drawn from academia, industry, government, and regulatory bodies. This multi-disciplinary approach ensures the panel is well-equipped to navigate the complexities of ethical AI integration.

The group’s primary task is to analyze the global and domestic adoption of AI in financial services. By examining international best practices and current Indian implementations, the panel aims to identify gaps and provide actionable insights. This step aligns with the RBI’s broader strategy to foster innovation while safeguarding ethical standards.

Key Responsibilities of the FREE-AI Panel

The mandate of the committee is both comprehensive and ambitious. It will focus on:

  • Evaluating the existing adoption of AI in financial services.
  • Reviewing various regulatory frameworks across the globe.
  • Identifying potential risks associated with AI applications.
  • Recommending robust governance structures for ethical AI usage.

The RBI’s fintech department will support the committee in these endeavors, ensuring the availability of necessary resources and expertise. The panel is expected to submit its findings and recommendations within a six-month timeframe, emphasizing the urgency of addressing ethical concerns in a rapidly evolving AI landscape.

Importance of the Initiative

AI has become integral to financial services, offering innovative solutions for fraud detection, risk assessment, and customer engagement. However, its widespread adoption raises concerns about transparency, accountability, and fairness. The FREE-AI committee seeks to bridge these gaps by establishing a framework that balances innovation with ethical considerations.

By taking a proactive stance, the RBI not only aims to lead India’s financial sector into a technologically advanced era but also ensures that advancements are rooted in responsible practices. This move could set a global benchmark for ethical AI governance.

With its report due in six months, the FREE-AI panel has a challenging yet crucial task ahead. Its recommendations are expected to shape policies that will impact stakeholders across the financial ecosystem, from banks and fintech companies to regulators and consumers.

The formation of this committee underscores RBI’s commitment to fostering a financial environment that embraces technological progress without compromising ethical standards.

Mourning a Statesman: Tributes Flow for Dr. Manmohan Singh

Condolences are streaming in from across the world, marking the profound loss of former Indian Prime Minister Dr. Manmohan Singh. Esteemed leaders from the United States, Canada, Sri Lanka, and neighbouring nations like Nepal, Maldives, and Afghanistan have joined India in mourning the passing of a visionary leader.

Dr. Singh, credited as the architect of India’s economic reforms, passed away at the age of 92 on Thursday night at the All India Institute of Medical Sciences in New Delhi. He leaves behind his wife Gursharan Kaur, a distinguished history professor, and three daughters.

Tributes pour infrom World Leaders

US Secretary of State Antony Blinken hailed Dr. Singh as a pivotal figure in strengthening the US-India partnership. “Dr. Singh was one of the greatest champions of the US-India strategic partnership. His leadership in the Civil Nuclear Cooperation Agreement showcased his commitment to advancing bilateral ties,” Blinken said. He extended heartfelt condolences to India, acknowledging Dr. Singh’s role in fostering the nations’ shared accomplishments over the past two decades.

Former Canadian Prime Minister Stephen Harper expressed his sorrow, remembering Singh as a man of “exceptional intelligence, integrity, and wisdom.” Harper, alongside his wife Laureen, extended sympathies to Dr. Singh’s family and friends.

In South Asia, the tributes were equally poignant. Nepal’s former Prime Minister Pushpa Kamal Dahal ‘Prachanda’ described Singh as a “visionary leader and extraordinary statesman” whose legacy will inspire future generations. Former Maldivian President Mohamed Nasheed reflected on Singh’s warmth, calling him a “benevolent father figure” and a steadfast friend to the Maldives.

Dr. Singh’s Global and National Legacy

Sri Lanka’s former President Mahinda Rajapaksa recognized Singh as the “architect of India’s economic liberalization” and credited him with shaping India’s rise as an economic powerhouse. Similarly, Afghanistan’s former President Hamid Karzai called Dr. Singh “an unwavering ally and friend” to Afghanistan, mourning his loss as one of India’s most illustrious sons.

The Indian government has declared a seven-day national mourning period to honor the revered statesman. His last rites will be performed with full state honors, reflecting his monumental contributions to the nation.

Dr. Manmohan Singh’s tenure as Prime Minister and his earlier role as India’s Finance Minister transformed the country’s economic landscape. His pioneering reforms opened up the Indian economy, ushering in an era of growth and globalization. His diplomatic finesse fostered stronger relations with both neighbouring and global powers.

As India and the world bid farewell to a leader of unmatched intellect and vision, Dr. Singh’s legacy as a reformer, economist, and statesman will continue to resonate across generations. May his soul rest in eternal peace.

Controversy Surrounds Alleged Misrepresentation of Indian Map in Congress Posters

A political storm has erupted in Belagavi, Karnataka, over the alleged misrepresentation of the Indian map displayed on posters by the Congress party. These posters were intended to commemorate the centenary of the 1924 Congress session, but they have instead ignited accusations of negligence and political appeasement. The Bharatiya Janata Party (BJP) and its ally, the Janata Dal (Secular) (JD(S)), have accused Congress of omitting key regions of Jammu and Kashmir, including Gilgit and Aksai Chin, which are integral to India’s sovereignty.

Background: The Centenary Celebrations

The Congress party organized celebrations across Belagavi to mark 100 years since the historic 1924 session of the Indian National Congress. The event’s intent was to celebrate India’s legacy and honor its freedom fighters. However, the posters designed for this occasion became a flashpoint for criticism when political opponents noticed the absence of Gilgit and Aksai Chin in the map depicted.

These regions, currently under Pakistan and Chinese control, respectively, are considered non-negotiable parts of India’s territory by the Indian government. The omission has led to a fierce backlash from the BJP and JD(S), who accused the Congress of disrespecting India’s sovereignty.

BJP’s Strong Response

The BJP has not held back in its criticism, accusing the Congress of indulging in “vote bank politics.” In a strongly worded post on social media platform ‘X,’ the national unit of the BJP alleged that the Congress is prioritizing its political gains over national interests.

Congress leader Rahul Gandhi, in particular, faced allegations from the BJP of being soft on China and Pakistan. The post described the Congress’ actions as an attempt to “break the nation” and accused the party of pandering to specific communities at the cost of national pride.

BJP MLA Basanagouda Patil Yatnal took the matter a step further by demanding legal action against the Congress. He invoked the National Honour Act and IPC Section 74, which penalize the publication of incorrect maps. Yatnal called for a case to be registered against the organizers of the centenary celebrations, labeling the incident as a deliberate affront to India’s territorial integrity.

JD(S) Joins the Fray

The JD(S) has also expressed outrage over the controversy. Describing the omission of Kashmir from the map as a “criminal act,” the JD(S) held Congress’ Deputy Chief Minister D.K. Shivakumar directly responsible.

In a statement, the party alleged that the Congress’ actions were part of a broader strategy of appeasement politics, aimed at garnering votes at the expense of national interests. The JD(S) has demanded swift action to rectify what they perceive as a betrayal of India’s unity.

Congress’ Defense

Deputy Chief Minister D.K. Shivakumar, who is also the Karnataka Congress unit president, has sought to downplay the controversy. In a measured response, he acknowledged the possibility of a mistake and assured that the posters would be removed if any errors were found.

“Some leaders might have made some mistake. We are removing everything,” Shivakumar stated, urging the opposition not to “make a fuss over a small issue.” Despite his assurance, the controversy has continued to dominate political discourse in Karnataka.

The 1924 Congress session in Belagavi holds significant historical importance as it was the only session presided over by Mahatma Gandhi. The event symbolized India’s fight for independence and highlighted the unity of the nation. However, the current controversy threatens to overshadow these historical celebrations, bringing political fault lines to the forefront.

Broader Implications

This controversy highlights the ongoing debate between nationalism and political strategy in Indian politics. While the BJP has positioned itself as a defender of India’s territorial integrity, the Congress finds itself on the defensive, struggling to justify the oversight.

The incident comes at a critical time for the Congress party, as it aims to rebuild its image and expand its voter base in Karnataka. However, the controversy risks alienating voters who prioritize nationalism and sovereignty. Public opinion appears divided, with many citizens expressing outrage over the alleged omission, while others view the incident as an unintentional error. Social media platforms have become battlegrounds for both criticism and defense of the Congress party.

The controversy over the alleged misrepresentation of the Indian map in Congress’ posters has sparked a heated political debate in Karnataka. While the BJP and JD(S) have used the incident to accuse Congress of undermining national integrity, the Congress maintains that the omission was an unintended mistake. As the nation watches this unfolding drama, the incident serves as a reminder of the sensitive nature of India’s territorial issues and the political ramifications of any missteps. Only time will tell how this controversy impacts the Congress party’s standing in Karnataka and beyond.

Youth: Pillars of India’s Future, Says PM Modi at Veer Bal Diwas

Prime Minister Narendra Modi underlined the transformative power of India’s youth in shaping the nation’s future, emphasizing the importance of equipping them with skills in advanced technologies like artificial intelligence (AI) and machine learning. Speaking at the Veer Bal Diwas event, Modi called for a forward-thinking approach to address the rapid changes brought by technological advancements.

Honoring the Legacy of Courage at Veer Bal Diwas

The event also marked a poignant tribute to the bravery of the Sahibzadas, Guru Gobind Singh’s sons, who made the ultimate sacrifice over 300 years ago. Modi commemorated their valiant stand against oppression, urging today’s youth to take inspiration from their unwavering courage and dedication to the nation. He highlighted how the Sahibzadas, despite their tender years, chose principles over submission to the Mughal Empire.

“The Sahibzadas remind us of the values of courage, selflessness, and faith,” Modi said. He encouraged young Indians to embody these virtues in their pursuit of a better and stronger India.

Preparing for a Tech-Driven Era

Addressing the technological revolution, Modi stressed the need for young Indians to be future-ready. “The world is moving from machines to machine learning, with AI taking the lead. Our youth must be equipped with the tools and skills to embrace these challenges,” he said. He reaffirmed the government’s commitment to nurturing young talent through policies that prioritize innovation, skill development, and access to cutting-edge technologies.

Modi also noted the significance of emerging fields like AI, machine learning, and robotics in driving economic growth and job creation. By fostering a culture of continuous learning and adaptability, he believes India can secure a leading position on the global stage.

The Prime Minister outlined his vision for a youth-driven India, emphasizing that the nation’s progress hinges on the potential of its younger generation. He reiterated the government’s efforts in creating opportunities for skill enhancement, education, and employment. “India’s youth are the architects of tomorrow. By investing in them today, we ensure a prosperous future,” Modi said.

As India navigates the complexities of a tech-driven world, the Prime Minister’s address served as a rallying call for the youth to embrace innovation, resilience, and patriotism. The event not only celebrated the legacy of the Sahibzadas but also set the stage for India’s next leap in technological and cultural advancement.

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