Tag Archives: India

Were India’s floods caused by reckless human greed?

http://www.guardian.co.uk/environment/terra-india/2013/jun/24/india-floods-himalayas

Cataclysmic floods in the northern state of Uttarakhand are reminder India must act to save its fragile mountains

Floods in India : Shiva statue being washed away once more in Rishikesh, Haridwar in Uttarakhand

A new Shiva statue being washed away in Rishikesh, Haridwar in Uttarakhand, India, during floods on 20 Jun 2013. Photograph: Indian Photo Agency/Rex Features

Natural disasters often follow a predictable path in India. A flood or an earthquake happens every few years, the government blames the vagaries of nature, the right sympathetic noises are made, and all is forgotten until the next one comes along. But last week’s cataclysmic floods in the northern Indian state of Uttarakhand, surrounded by the Himalayas, have provoked a debate on whether this particular disaster was caused – or at least worsened – by reckless human greed.

At last count, 5000 people are feared killed, and the number is expected to rise further. More than 33,000 people have been rescued in an amazing effort by the Indian army, but an estimated 19,000 victims are still stranded.

On the face of it, the floods seem like a calamity that was unpreventable. The Indian meterological department reported a record rainfall of 385 mm during the first few weeks of June, which is 440 per cent over the usual rainfall. But green groups say that while a cloudburst may have been the immediate cause of floods, the region has been slowly eroded by rampant development. Too many roads, hotels and buildings have caused the valley to collapse like a stack of dominoes.

The government is blaming a massive “tsunami”, but this easy blame masks its criminal neglect of disaster systems and history of ignoring danger signs. A report released by the Comptroller and Auditor General in April 2013 revealed that the State Disaster Management Authority has never met, has received no funds, and has framed no plan to cope with disaster, despite a series of deadly landslides over the past few years.

Development in the Himalayas has long been contentious. Both the ruling Congress party and the opposition BJP party have insisted that the people of Uttarakhand want, nay need, development. On 18 December 2012 the Ministry of Environment and Forests declared a 135 km stretch along the river as an eco-sensitive zone, which meant that construction along the river, especially hotels and hydropower projects, would be banned. But the Uttarakhand Ministry passed a resolution against the zone, and chief minister Vijay Bahuguna hastily met the prime minister to argue that the order was opposed by local people because it would affect their livelihoods. End result: the order was ignored by the state government.

But greens allege that successive governments from both parties are colluding with land and construction mafia to skim off profits from construction. It’s supremely convenient to argue that locals want development at any cost, but has anyone asked the people of Uttarakhand how they feel about lethal landslides every couple of years?

Then there’s the iffy question of dams. Politicans love them, and currently around 70 dams are supposed to be built on the River Ganga. Many green groups say they are not against all dams. “We really need to move beyond this ‘All dams are bad’ philosophy. No one’s arguing that sometimes we need dams, but do we really need 70?,” asked Dr Sunita Narain,environmentalist and director general of the Centre for Science and Environment, speaking on the popular TV talk show “We the People” yesterday. More importantly, Narain pointed out that there is no clear cut policy on dams, and no thought given to how many dams should be built, where, or how.

Meanwhile, no one’s talking about the fact that growing numbers of religious pilgrims are putting huge stress on the Himalayan ecosystem. The Hindu shrines of Kedarnath, Badrinath, Gangotri and Yamunotri were visited by a staggering 30 million people this year. A move to restrict the entry of pilgrims would be immensely unpopular in such a religious country, which explains why political parties refuse to discuss it. But experts, including geologists, have suggested regulating the entry of tourists.

In hindsight, of course, politicians are full of helpful suggestions. The good news is that Union minister of state for environment Jayanthi Natarajan is now strongly supporting an eco-sensitive zone, though a mere 135 km may not make much difference. “Uttarakhand must not compromise on its ecology,” Natarajan is reported as saying.

Too little, but hopefully not too late. India needs to come up with an action plan to save its mountains, one that takes the mountain people into consideration, restricts pilgrims, considers dams carefully and aims for sustainable development. Not easily done, but if the government doesn’t get its act together, expect more disasters in the future.

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US wants India to bring Hamid Karzai around

http://www.hindustantimes.com/India-news/NewDelhi/US-wants-India-to-bring-Hamid-Karzai-around/Article1-1081845.aspx?hts0021

An America obsessed with the idea Pakistan’s assistance is necessary for an orderly withdrawal from Afghanistan, pushed a soft line on Pakistan with the Indian government.

US secretary of state John Kerry, during the fourth Indo-US strategic dialogue, urged his Indian interlocutors to prod a reluctant Afghan President Hamid Karzai to come around to supporting talks with the Taliban.

“You have good ties with Karzai,” Kerry reminded the Indian side, as he urged India to use its influence on the Afghan president for the peace talks with the Taliban, sources told HT.

It is learnt that at the discussions, Pakistan didn’t figure in a major way and  Kerry mostly stuck to the line of improving trade ties and the “positive signals” Pakistan PM Nawaz Sharif was sending to  India.

At a press briefing, Kerry refused to answer a question as to whether the Haqqani network, a Taliban affiliate close to the ISI, would be part of the proposed peace talks.

According to sources, in another side of a soft Pakistan line, the US was reluctant in “adequately emphasising” standard formulations  like “Pakistan being a safe haven for terrorists” in the context of Afghanistan.

In a bid to assuage Indian concerns on the Afghan peace process, Kerry reassured, “We will consult very closely with India and with others in the region.”

He also said that the Taliban, would have to “disassociate themselves from al-Qaida and from violence” and respect the constitutional protections for women and minorities.

As the Af-Pak region remains a bone of contention between the two sides, the US was looking at greater economic relations to improve ties.

And in strategic terms, both sides sought greater salience in the Indian Ocean and the Pacific region as part of a rebalancing strategy.

RBI can sell upto $30bn to support rupee; may opt for NRI bond

http://www.hindustantimes.com/business-news/WorldEconomy/RBI-can-sell-upto-30bn-to-support-rupee-may-opt-for-NRI-bond/Article1-1081534.aspx

In order to arrest rupee depreciation, the Reserve Bank of India has a capacity to sell up to $30 billion from the forex reserves and may go for an NRI bond issue to mop-up up to $20 billion, foreign brokerage Bank of America Merill Lynch said on Monday.

“We expect the RBI to eventually mobilise $20 billion via NRI bonds, a la 1998 Resurgent India Bonds and 2001 India Millennium Deposits, as the sell-off of emerging market debt should constrain the ability of FII debt limit hikes to raise forex reserves,” it said, adding that the central bank can sell upto $30 billion to support the rupee.

The BofAML report said that five year money can be raised by issuing the 7 to 9% coupon bonds to stabilise markets, just as it was done in 1998 and 2001.

The country’s banks had raised $4.8 billion and $5.5 billion from the bonds targeted at the diaspora during the economic crisis years in 1998 and 2001, respectively.

BofAML said it expects RBI to defend the Rs. 60 to a dollar level. The rupee opened 40 paise down against the dollar on Monday and was trading at Rs. 59.74 to the dollar at 2:37pm.

Every round of volatility in the rupee (the current one has been on for over three weeks now) causes a dent of up to $15 billion to the forex reserves, and considering where the reserves stand right now, RBI can sell up to $30 billion, the report said.

The selling will get the country’s import cover down to six months from the current seven months, the BofAML said.

Its strategists expect the rupee to peak at Rs. 59 to a dollar, according to the report.

RBI will start buying rupee once markets stabilise and the inflows from Unilver buy back, which would be in the region between $3 billion and $5 billion, happen,  it said.

Raising the rates is not the answer to arrest the fall in rupee, it said, noting that the differential between the $Federal Reserve’s lending rate and the RBI’s is already at a peak of 7%.

India squeezed by QE3

http://www.hindustantimes.com/business-news/WorldEconomy/India-squeezed-by-QE3/Article1-1081741.aspx

US Federal Reserve chairman Ben Bernanke’s comment on rolling back the monetary stimulus package couldn’t have come at a more inopportune time for the Indian economy.

The rupee has crashed to a new low, nearly touching 60 and still counting. As portfolio investors pull out funds, the slide in equity markets continues.

Blame it on QE3. It sounds like the name of a scientific project, but it is essentially a financial market jargon for the third round of quantiative easing or QE by the US central bank.

It involves a large purchase of bonds by the Fed to pump in loads of cheap money into the financial system to aid the American economy. Part of these funds came to emerging markets such as India that were still delivering returns in high double-digits a year.

The tide has since turned.

Financial investors have begun selling Indian stock since the beginning of May and with the curtains likely to come down on the US stimulus package, one can safely expect more billions to move out.

A weak rupee can also fan inflation by making fuel and other imported goods costlier. Oil companies fear that if the trend sustains for a few more days, retail prices of transport fuel would have to be hiked again, which can fan inflation.

Higher inflation will also limit the RBI’s ability to cut interest rates, dimming hopes of lower loan EMIs for individuals.

Also, the record current account deficit (CAD) may restrict the RBI’s elbow room to prop up the rupee by dipping into its $290 billion of foreign exchange reserves, enough to cover imports for seven months, analysts said.

“A reversal of capital inflows would likely wreak havoc on the rupee, as financing the CAD becomes difficult,” said Sonal Varma, economist at research firm Nomura.

“Return of foreign capital in the short term will critically depend on adopting the right policy mix to attract higher investment inflows and improve growth prospects of the economy,” said DK Joshi, chief economist, CRISIL Research.

Struggling to move forward

http://www.hindustantimes.com/editorial-views-on/Edits/Struggling-to-move-forward/Article1-1081625.aspx

Hindustan Times
New Delhi, June 24, 2013

It was telling that the storm over Washington’s attempts to hold open talks with the Taliban in Qatar all but drowned out the maiden Indo-US strategic dialogue of US secretary of state John Kerry. India and the US are now clearly moving apart on the issue of Afghanistan. The Barack Obama

administration is determined to have the US military withdraw from Afghanistan at all costs — including allowing Pakistan to broker a deal that would allow the Taliban to govern in Kabul.

India is strongly opposed to any talk of any future Afghan government that includes the Taliban seeing such a development as a major threat to its security and a fillip for the worst elements in Pakistan. The question is whether the nascent Indo-US strategic partnership can survive differences over Afghanistan — and thus Pakistan.

In a mature strategic relationship, it is not uncommon for partner nations to disagree fundamentally over specific issues while maintaining the larger relationship. France is a treaty ally of the US but has an unusually contentious relationship with the sole superpower.

One should expect India, whose relationship with the US is far more informal and recent, to have its fair share of differences with Washington. The Indo-US relationship is strengthening and deepening in a whole host of other areas.

At the strategic dialogue here, the two largest democracies see eye-to-eye on regions like East Asia and the Indian Ocean and in areas like energy and counterterrorism.

The two countries have dozens of dialogues on every conceivable topic — the kind of interaction that would have been inconceivable even a decade ago.

Yet it is clear that the initial expectations of the Indo-US relationship have not been fulfilled. It would be too much to expect something as large as the Indo-US civil nuclear deal to once again animate relations.

And much of the quiet in areas like defence is because of the bureaucratic hurdles both sides have thrown up against each other. Economic difficulties in both nations have taken the steam out of bilateral trade and investment, leaving only a residue of disputes and protectionist measures.

But what has muddied the waters the most has been the geopolitical uncertainty that has infected both countries. Obama initially flirted with China, went back and forth on Afghanistan, and now makes India wonder about where the US is going with the Persian Gulf.

New Delhi has since been reassured about the US commitment to the Asia-Pacific but believes its worst fears about Afghanistan may be coming true. Until these brushes on the larger canvas are made clearer to the satisfaction of both sides, the Indo-US relationship will struggle to move forwards in the smaller, tactical areas.

Kerry, Khurshid lob visa issue into IT industry court

http://www.thehindu.com/business/Industry/kerry-khurshid-lob-visa-issue-into-it-industry-court/article4847123.ece?homepage=true

The strategic dialogue also provides a roadmap to resolving other economic issues

The Fourth India-US strategic dialogue, co-chaired by External Affairs Minister Salman Khurshid and U.S Secretary of State John Kerry, did not resolve any of the economic issues during their sitting here on Monday but did provide a road map to resolving some of them.

India’s pressing concerns about a new law that will impose high fees for visas for software professionals will now be largely quarterbacked by corporates.

Reluctant America

India had wanted the issue to be discussed at a meeting of the Trade Policy Forum because it feels the higher visa fees is more of a non-tariff barrier than an immigration issue but the U.S. was reluctant. Both sides felt the industry, which would bear the brunt of the fee hike, should take it up with American legislators framing a new immigration law.

July meeting

Accordingly, this will be discussed at a meeting of the Indo-U.S. CEOs Forum on July 12 in Washington. This forum will also further develop joint initiatives and will discuss ways to overcome business challenges.

During the dialogue, New Delhi pointed out that Indian software professionals working in the U.S. was the pillar of the new closeness between the two countries.

Curbs such as a high upfront visa fee were a trade issue as it affected the working of Indian software companies in the U.S.

The U.S., on the other hand, pressed for a bilateral investment protection agreement but Indian diplomats wanted Washington to be patient as the new template was still being worked out by the Finance Ministry.

The existing format has the provision of a sovereign guarantee for every investment decision.

The Finance Ministry is now working on a model that not only keeps sovereign guarantees out but prohibits aggrieved companies from going in for arbitration if they lose their case in civil courts.

The dialogue also saw India expressing willingness on increasing the foreign direct investment limit in sectors such as defence and insurance although the Government’s ability to deliver on any likely commitment remains doubtful.

 

India assures U.S. a share of nuclear pie

http://www.thehindu.com/news/national/india-assures-us-a-share-of-nuclear-pie/article4846708.ece?homepage=true

Sandeep Dikshit

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U.S. Secretary of State John Kerry with External Affairs Minister Salman Khurshid during a press conference in New Delhi on Monday. Photo: R.V. Moorthy
The Hindu U.S. Secretary of State John Kerry with External Affairs Minister Salman Khurshid during a press conference in New Delhi on Monday. Photo: R.V. Moorthy

India and the U.S. on Monday agreed to set a timeline for operationalising the civil nuclear agreement. The Fourth Strategic Dialogue co-chaired by U.S. Secretary of State John Kerry and External Affairs Minister Salman Khurshid here reviewed several issues ranging from the status of civil nuclear ties between the two countries through defence trade to education and cultural exchanges — through some 30 bilateral panels.

The two ministers felt further high-level meetings should be held to achieve convergence and progress, especially in strategic issues. An example of such meetings will be the visit of U.S. Vice President Joe Biden scheduled for mid-July.

The new U.S. Af Pak envoy James Dobbin, fresh from a visit to Qatar where the Taliban has opened an office, will arrive this Wednesday to ensure India’s concerns are taken on board as the West prepares to politically integrate the insurgent group, Mr. Kerry said at a joint press conference with Mr. Khurshid.

At the press conference, Mr. Kerry almost let slip America’s chagrin at not having tasted the fruits of the India-U.S. civil nuclear agreement by drawing attention to the enormous domestic political capital invested by Democrats and Republicans to ensure New Delhi was given a special exemption by the Nuclear Suppliers Group (NSG).

The Kerry-Khurshid meeting set September as a possible timeline for resolving two issues that have thwarted Westinghouse from setting up six reactors in Gujarat. Another company GE will set up an equal number in Andhra Pradesh but its reactor design has not yet been cleared by the U.S. nuclear regulator. India had promised these multi-billion bonanzas in exchange for supporting its case at the NSG and the International Atomic Energy Agency.

While Washington was able to make India agree on a deadline for clearing Westinghouse’s mega civil energy project, India was handed an assurance for importing shale gas from the U.S., which is likely to accrue by 2016-17. The shipments are likely to originate at the proposed LNG export terminal at Cove Point, Maryland.

The U.S. also continued to press India on adopting clean energy technologies. Of the large number of joint fact sheets released on every conceivable subject discussed by the two sides, the one on this was the most comprehensive. On Sunday, Mr. Kerry spent nearly half of his 45-minute lecture in convincing India to adopt clean technologies.

Apart from Afghanistan, another sore issue was cyber-snooping by American intelligence agencies. Officials had earlier expressed concern over double standards followed by Internet companies — denying India access to emails while happily opening their vaults to U.S. intelligence agencies.

But Mr. Khurshid sought to play down the controversy, even telling a correspondent that concern was not the right word to use. Mr. Kerry told newspersons that notwithstanding vigorous American efforts to arrest the whistleblower, access by its intelligence agencies to emails and other electronic messaging was meant to track patterns and not to read the content.

Differing viewpoints on Iran cropped up during the press meet. Mr. Kerry was strident on Iran’s refusal to fall in line with the West’s intentions and lauded India for being “very cooperative in holding them [Iran] accountable for proliferation.”

He hoped New Delhi would step in to convince the new leadership in Tehran to fall in line with the West. Mr. Khurshid, recently back from Tehran, maintained that India greatly valued its relationship with Iran and would prefer to judge and test the intentions of the new leadership before considering such a plunge.

Unhappy with compensation

India did not raise the killing of one fisherman and the injuries caused to two others by a U.S. warship off the coast of Abu Dhabi in July last year. In the past, India had expressed dissatisfaction with the paltry compensation given to the injured as well as with a heavily crossed out U.S. Navy probe report which put the blame on the three Tamil fishermen.

Swiss money: India slips to 70th position; UK on top

http://profit.ndtv.com/news/economy/article-swiss-money-india-slips-to-70th-position-uk-on-top-323630?pfrom=home-otherstories

Zurich/ New Delhi: India has slipped to 70th position in terms of foreign money lying with the Swiss banks and accounts for a meagre 0.10 per cent of total global wealth held in the Switzerland banking system.

While much hue and cry is made over huge amounts of illicit wealth stashed by Indians in Swiss banks, the latest official data released by Switzerland’s central bank shows that the money they owed to Indian clients at the end of last year was 1.42 billion Swiss francs (about Rs. 9,000 crore).

While the UK continues to account for the largest chunk of such funds, India has now slipped lower to 70th position – the lowest rank among all major economies of the world, shows an analysis of annual data released by Swiss National Bank (SNB) on all the banks present in the European country.

India was ranked 55th for such funds a year ago with a total amount of 2.18 billion Swiss francs belonging to the Indian individuals.

Among the top-ten jurisdictions in terms of source of money with Swiss banks, the UK is now followed by the US, West Indies, Jersey, Guernsey, Germany, France, Bahamas, Cayman Islands and Hong Kong.

The funds owed by the Swiss banks to their UK clients stood at 295 billion Swiss francs, accounting for about 22 per cent of total such funds (over 1.4 trillion Swiss francs).

The major countries ranked among the top-25 include include Singapore, Japan, Italy, Australia,  Russia, Netherlands, Saudi Arabia and Cyprus.

Besides, China was ranked 26th, Canada 28th, Brazil at 39th and South Africa at 50th. India’s neighbouring country Pakistan was also ranked one place higher at 69th, although countries like Mauritius, Hungary, Denmark, Finland, Libya, Brunei and Sri Lanka are positioned below India.

As per SNB data, the Swiss banks saw a decline in funds belonging to most of their foreign clients during 2012 and the funds belonging to their domestic clients surpassed those of overseas ones for the first time in their history.

The total funds with Swiss banks slipped by over nine per cent to a record low of 1.4 trillion Swiss francs at the end of 2012, while the Indians’ money also hit a record low with a fall of about 35 per cent during the year, as a global clampdown against the famed secrecy wall of Switzerland banking system made it unattractive for their global clients.

Total funds held by Indian individuals and entities included 1.34 billion Swiss francs held directly by Indian individuals and entities, and another 77 million Swiss francs through ‘fiduciaries’ at the end of 2012.

Fiduciaries are essentially wealth fund managers who hold the money of Indian private holders and families in the so-called numbered accounts.

The Swiss banks’ direct liabilities towards clients from India include funds held in savings and deposit accounts by Indian individuals, financial institutions and corporates.

The data has been released at a time when Switzerland is facing growing pressure from the US and other countries to share the foreign client details, while its own lawmakers are resisting such measures.

The funds, described by SNB as ‘liabilities’ of Swiss banks towards their clients from India, are the official

figures disclosed by the Swiss authorities and do not indicate towards the quantum of the much-debated alleged black money held by Indians in the safe havens of Switzerland.

SNB’s official figures do not include the money Indians or others might have in Swiss banks in the names of others. The sharp decline in Indian money in Swiss banks during 2012 followed a significant increase in the previous year, when such funds had risen for the first time in five years.

The quantum of funds held by Indians in Swiss banks stood at a record high level of 6.5 billion Swiss francs (over Rs. 41,000 crore) at the end of 2006, but has declined by over five billion Swiss francs (over Rs. 32,000 crore) since then.

For clients across the world, total funds in Swiss banks stood at a record high level of $2.6 trillion at the end of 2007, but has fallen by over $1 trillion since then.

In a White Paper on black money tabled in Parliament last year, the Indian government said that the total liabilities of Swiss banks towards Indians have been coming down since 2006 and fell by more than Rs. 14,000 crore during 2006-2010 period.

Amid allegations of Indians stashing illicit wealth abroad, including in Swiss banks, government has said it is making various efforts to bring back the unaccounted money.

While a new treaty has been put in place for sharing of information on issues related to tax crimes on a prospective basis, Switzerland has also agreed to a limited retrospective clause for such information exchange in case of India.

Experts have been saying that there has been a “perceptible flight of funds” of Indian holders from Swiss banks to other places in the recent years.

At the same time, the global pressure has been rising on Switzerland to ask its banks to share information about their clients with foreign governments.

It is being suspected now that Indians having illicit wealth in Swiss banks may be moving their funds in fear of being exposed due to growing scrutiny. At the same time, even those having legitimate funds in Swiss banks may be moving away, due to a growing level of negativity attached to them.

India, US to exchange information on corporate frauds: Sachin Pilot

http://profit.ndtv.com/news/corporates/article-india-us-to-exchange-information-on-corporate-frauds-sachin-pilot-323632

New York: With an aim to avert possible corporate frauds and safeguard the interest of investors, India is looking for greater exchange of information and regulatory cooperation with the US.

Besides the US government, India will also engage with the companies, universities and other institutions in New York for enhanced cooperation in various areas, Corporate Affairs Minister Sachin Pilot said.

An increased interaction at different levels would not only boost the bilateral ties, but also help in building stronger checks against corporate frauds in the two countries, the minister told PTI in an interview here during his recent visit to the US.

“We need to ensure there is adequate transparency in the dealings of companies’ disclosures, keeping in mind the number of corporate frauds that have been unearthed in the recent past both in the US and in India,” Mr Pilot said.

The minister said that India and the US would share data to prevent such frauds from happening in the future.

“We want to work not just with the government, but also with the private sector, universities and institutions across the US, enhance training programs, exchange regulatory officers, and promote faculty research and staff training both in judicial and non-judicial areas,” he said.

During his visit, Mr Pilot had meetings with the US Federal Trade Commission chairman FTC Ramirez and Assistant Secretary of State Robert Blake, among others.

Emphasising on the need for greater transparency in matters related to corporate governance, the minister said, “We want to make sure that the aspect of corporate governance is taken into consideration while making laws and legislations.”

“At the same time, companies also need to have more transparency and disclosures in the interest of stakeholders and the general public,” he added.

Mr Pilot also expressed hope that the US investors would look positively at India, which is returning to its growth path after some stagnation for about one and half years.

“As we are moving up, we are looking at investments aggressively from the US. We are looking up to the US investment community in the areas of power, retail, aviation, real estate and infrastructure areas. We see a great interest in India in these areas,” he added.

“The economic downturn in last two years has impacted the sentiments of investors. There were some hiccups and we are working on them. India is still a favourable destination for investors,” Mr Pilot said.

He also hoped that the pending proposals, including those for greater foreign investment in insurance and pension sectors, would be cleared soon.

Story first published on: June 23, 2013 12:26 (IST)

Tags: Sachin Pilot, Robert Blake, Corporate frauds, US economy, Economic growth, Corporate Affairs Minister

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From Reuters

When the Ben and Beijing party comes to an end

On June 24, 2013 16:22 (IST)

When the Ben and Beijing party comes to an end Investors have always been able to count on backing from two sources – US Fed chief Ben Bernanke and Beijing.

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Market Data provided by © Accord Fintech.
© Copyright NDTV Convergence Limited 2013. All rights reserved.

Rupee ends off day’s low at 59.68 against dollar

http://profit.ndtv.com/news/forex/article-rupee-ends-off-days-low-at-59-68-against-dollar-323677?pfrom=home-latest

The rupee fell to near record lows on Monday as foreign investors continue to sell debt and stocks as part of an exit from emerging markets, with only fears of central bank intervention arresting a further drop.

The partially convertible rupee closed at 59.68/69 per dollar, against its previous close of 59.27/28. It fell to a low of 59.8250 in session.

The rupee is likely to continue hovering around a record low of 59.9850 hit on Thursday as long as global markets remain weak over worries about the rollback of U.S. monetary stimulus and concerns about China’s financial sector.

Dealers were split about whether the Reserve Bank of India (RBI) had intervened in the spot and onshore forward markets, suggesting any action would not have been strong. The central bank is seen likely to defend the 60 level for the rupee, which also provides formidable technical and psychological resistance.

Reserve Bank of India Deputy Governor Anand Sinha said on Monday the central bank and the government are doing whatever is needed to get a “hold over” the deteriorating macro economic conditions.

Investors are now awaiting the release of the current account deficit data on Friday, which will underline whether the funding pressures for the economy will further rise.

“One key factor is whether foreign equity investors pull out. But the government and RBI look determined to take steps to stem the rupee’s fall,” said Samir Lodha, senior partner at QuantArt.

“The RBI seems to have been active in the forex market over the past few sessions. They seem to be protecting the 60 level for now.”

The Sensex shed 1.2 per cent on continued worries about outflows after foreign institutional investors sold cash shares for nine straight sessions, totalling Rs. 7760 crore, as per exchange and regulatory data.

Foreign funds have sold a net $5.33 billion in rupee debt since May 22, the day Fed Chairman Ben Bernanke first hinted at stimulus withdrawal.

In the offshore non-deliverable forwards, the one-month contract was at 60.14, while the three-month was at 60.84.

In the currency futures market, the most-traded near-month dollar/rupee contracts on the National Stock Exchange, the MCX-SX and the United Stock Exchange all closed around 59.79 with a total traded volume of $6.4 billion.