Free fall of the Rupee:
Context:
The Indian rupee hit an all-time low against the U.S. dollar this week weakening past the 79 rupees to a dollar mark and selling as low as 79.05 against the dollar.
Relevance:
GS III- Indian Economy
Dimensions of the Article:
- What is happening with the rupee?
- What determines the rupee’s value?
- What is Currency Depreciation and what are its causes?
What is happening with the rupee?
The Indian rupee has been witnessing a steady decline this year, losing more than 6% against the U.S. dollar since the beginning of 2022.
India’s forex reserves:
- It has also dropped below $600 billion, plunging by more than $50 billion since September, 2021, when forex reserves stood at an all-time high of $642 billion.
- The drop in India’s forex reserves is believed to be largely due to steps taken by the Reserve Bank of India to support the rupee.
- RBI officials, however, have noted that the drop in forex reserves is due to a fall in the dollar value of assets held as reserves by the RBI.
- For instance, if a portion of the reserves are in euros and the euro depreciates against the dollar, this would cause a drop in the value of forex reserves.
Aim of the RBI’s policy:
- To allow the rupee to find its natural value in the market but without undue volatility or causing unnecessary panic among investors.
- State-run banks are usually instructed by the RBI to sell dollars in order to offer some support to the rupee.
- By thus selling dollars in the open market in exchange for rupees, the RBI can improve demand for the rupee and cushion its fall.
What determines the rupee’s value?
The value of any currency is determined by demand for the currency as well as its supply.
- When the supply of a currency increases, its value drops.
- On the other hand, when the demand for a currency increases, its value rises.
In the wider economy,
- Central banks determine the supply of currencies, while the demand for currencies depends on the amount of goods and services produced in the economy.
In the forex market,
- The supply of rupees is determined by the demand for imports and various foreign assets. So, if there is high demand to import oil, it can lead to an increase in the supply of rupees in the forex market and cause the rupee’s value to drop.
- The demand for rupees in the forex market, on the other hand, depends on foreign demand for Indian exports and other domestic assets.
- So, for instance, when there is great enthusiasm among foreign investors to invest in India, it can lead to an increase in the supply of dollars in the forex market which in turn causes the rupee’s value to rise against the dollar.
What is Currency Depreciation and what are its causes?
- Currency depreciation is a fall in the value of a currency in terms of its exchange rate versus other currencies.
- Economic fundamentals, interest rate differentials, political instability, or risk aversion can cause currency depreciation.
- Orderly currency depreciation can increase a country’s export activity as its products and services become cheaper to buy.
- Currency depreciation in one country can spread to other countries.
- Countries with weak economic fundamentals, such as chronic current account deficits and high rates of inflation, generally have depreciating currencies.
- Currency depreciation, if orderly and gradual, improves a nation’s export competitiveness and may improve its trade deficit over time. But an abrupt and sizable currency depreciation may scare foreign investors who fear the currency may fall further, leading them to pull portfolio investments out of the country. These actions will put further downward pressure on the currency.
- Easy monetary policy and high inflation are two of the leading causes of currency depreciation. When interest rates are low, hundreds of billions of dollars chase the highest yield. Expected interest rate differentials can trigger a bout of currency depreciation.
- Central banks will increase interest rates to combat inflation as too much inflation can lead to currency depreciation.
- Additionally, inflation can lead to higher input costs for exports, which then makes a nation’s exports less competitive in the global markets. This will widen the trade deficit and cause the currency to depreciate
Impact of the drop
- Depreciation in rupee is a double-edged sword for the Reserve Bank of India.
- While a weaker currency may support exports amid a nascent economic recovery from the pandemic, it poses risk of imported inflation, and may make it difficult for the central bank to maintain interest rates at a record low for longer.
Land Slides:
Context:
Eight people were killed in a massive landslip in Manipur. As many as 45 are feared to be trapped in the debris.
- The disaster took place in Noney district destroying a railway construction camp near Tupul.
Relevance:
GS III- Disaster Management
Dimensions of the Article:
- What are Landslides?
- Two Primary varieties of Landslides in India
- Why are Landslides more frequent in the Himalayas than in the Western Ghats?
What are Landslides?
Landslides are physical mass movement of soil, rocks and debris down the mountain slope because of heavy rainfall, earthquake, gravity and other factors.
Why do Landslides Occur?
- Base of the huge mountains eroded by rivers or due to mining activities or erosion agents resulting in steep slopes.
- Increased industrialisation leading to climate change and weather disturbances.
- Change in river flow due to construction of dams, barriers, etc.
- Loose soil cover and sloping terrain.
Two Primary varieties of Landslides in India
I- Himalayas
- India has the highest mountain chain on earth, the Himalayas, which are formed due to collision of Indian and Eurasian plate, the northward movement of the Indian plate towards China causes continuous stress on the rocks rendering them friable, weak and prone to landslides and earthquakes.
- The Northeastern region is badly affected by landslide problems causing recurring economic losses worth billions of rupees.
II- Western Ghats
- A different variety of landslides, characterized by a lateritic cap (Laterite is a soil and rock type rich in iron and aluminium , and is commonly considered to have formed in hot and wet tropical areas), pose constant threat to the Western Ghats in the South, along the steep slopes overlooking the Konkan coast besides Nilgiris, which is highly landslide prone.
- The problem needs to be tackled for mitigation and management for which hazard zones have to be identified and specific slides to be stabilized and managed in addition to monitoring and early warning systems to be placed at selected sites.
Zone Map
Himalayas of Northwest and Northeast India and the Western Ghats are two regions of high vulnerability and are landslide prone.
Why are Landslides more frequent in the Himalayas than in the Western Ghats?
In the Himalayas, Landslides are very frequent because:
- Heavy snowfall in winter and melting in summer induces debris flow, which is carried in large quantity by numerous streams and rivers – which results in increases chances of Landslides.
- Himalayas are made of sedimentary rocks which can easily be eroded – hence, erosions contribute to more landslides.
- Drifting of Indian plate causes frequent earthquakes and resultant instability in the region.
- Man-made activities like grazing, construction and cultivation abet soil erosion and risks of landslides.
- Himalayas not yet reached its isostatic equilibrium which destabilizes the slopes causing landslides.
- Diurnal changes of temperature are much more in northern India than in southern slopes – weakening the rocks and increasing mass wasting and erosion.
In the Wester Ghats, Landslides are comparatively less frequent because:
- Western Ghats are eroded, denuded, aged, mature, worn out by exogenic forces and have a much lower height – hence, occurrence of Landslides is lesser.
- The Western Ghats are on more stable part of Indian plate, hence, there is a lesser occurrence of earthquakes and landslides.
- While steep slope on western side with high rainfall creates idea condition for landslide but gentle eastern slope with low rainfall and rivers in senile stage, counters the condition.
- Moving of Indian plates doesn’t affect the Western Ghats much (as they are old block mountains), hence the reduced number of landslides.
- Small & swift flowing streams of western side and big matured rivers on eastern side (like Krishna, Godavari, etc) cannot carry large amount of debris.
POEM by ISRO
Context:
Besides placing three Singaporean satellites in precise orbit, the Indian Space Research Organisation (ISRO) also achieved the feat of successfully launching the PSLV Orbital Experimental Module or ‘POEM’.
Relevance:
GS III- Science and Technology
Dimensions of the Article:
- What is POEM?
- How will ISRO keep POEM ‘alive and stable’ in orbit?
- Has ISRO repurposed and used PS4 rocket junk earlier?
What is POEM?
- The PSLV Orbital Experimental Module is a platform that will help perform in-orbit experiments using the final, and otherwise discarded, stage of ISRO’s workhorse rocket, the Polar Satellite Launch Vehicle (PSLV).
- The PSLV is a four-stage rocket where the first three spent stages fall back into the ocean, and the final stage (PS4) — after launching the satellite into orbit — ends up as space junk.
- However, in PSLV-C53 mission, the spent final stage will be utilised as a “stabilised platform” to perform experiments.
- POEM is carrying six payloads, including two from Indian space start-ups Digantara and Dhruva Space.
How will ISRO keep POEM ‘alive and stable’ in orbit?
- According to ISRO, POEM has a dedicated Navigation Guidance and Control (NGC) system for attitude stabilisation, which stands for controlling the orientation of any aerospace vehicle within permitted limits.
- The NGC will act as the platform’s brain to stabilize it with specified accuracy.
- POEM will derive its power from solar panels mounted around the PS4 tank, and a Li-Ion battery. It will navigate using “four sun sensors, a magnetometer, gyros & NavIC”.
- It carries dedicated control thrusters using Helium gas storage. It is enabled with a telecommand feature
Has ISRO repurposed and used PS4 rocket junk earlier?
- The Indian space agency first demonstrated the capability of using PS4 as an orbital platform in 2019 with the PSLV-C44 mission that injected Microsat-R and Kalamsat-V2 satellites into their designated orbits.
- The fourth stage in that mission was kept alive as an orbital platform for space-based experiments.
- While in that mission, the fourth stage had Li-Ion batteries, solar panels are an addition this time.
- The latest repurposing and upgrade of the fourth stage of the PSLV rocket involves stabilization of the orbital platform.
Russia withdrawal from Snake Island:
Relevance:
GS II- International Relations
Dimensions of the Article:
- About Snake Island
- About the Black Sea
- Russia and the Black Sea
- Black Sea in the Ukraine war
About Snake Island
- Zmiinyi Island, also known as Snake or Serpent Island, is a small piece of rock less than 700 metres from end to end, that has been described as being “X-shaped”.
- It is located 35 km from the coast in the Black Sea, to the east of the mouth of the Danube and roughly southwest of the port city of Odessa.
- The island, which has been known since ancient times and is marked on the map by the tiny village of Bile that is located on it, belongs to Ukraine.
- On February 24, the day Russia launched its invasion, two warships from the Russian Black Sea Fleet, Vasily Bykov and Moskva, attacked Snake Island, followed by Russian troops landing on it.
- Ukraine has claimed to have launched several attacks on the Russian occupiers of Snake Island even before the latest ongoing operation.
- Recently, Ukraine said it had sunk a Russian naval tug called Spasatel Vasily Bekh, which was delivering personnel and military supplies to the island.
- Earlier in April, it had sunk the Moskva, the 600-foot flagship of the Black Sea Fleet, which had attacked the island on day 1 of the war.
About the Black Sea
- The Black Sea is a marginal sea of the Atlantic Ocean lying between Europe and Asia; east of the Balkans (Southeast Europe), south of the East European Plain in Eastern Europe, west of the Caucasus, and north of Anatolia in Western Asia.
- The Black Sea is bordered by Bulgaria, Georgia, Romania, Russia, Turkey, and Ukraine.
- The Black Sea ultimately drains into the Mediterranean Sea, via the Turkish Straits and the Aegean Sea.
- The Bosporus Strait connects it to the small Sea of Marmara which in turn is connected to the Aegean Sea via the Strait of the Dardanelles. To the north, the Black Sea is connected to the Sea of Azov by the Kerch Strait.
Russia and the Black Sea
- The famed water body bound by Ukraine to the north and northwest, Russia and Georgia to the east, Turkey to the south, and Bulgaria and Romania to the west, which links to the Sea of Marmara through the Bosphorus and then to the Aegean through the Dardanelles, has traditionally been Russia’s warm water gateway to Europe.
- For Russia, the Black Sea is both a stepping stone to the Mediterranean as well as a strategic buffer between NATO and itself.
- Domination of the Black Sea region is a geostrategic imperative for Moscow, both to project Russian power in the Mediterranean and to secure the economic gateway to key markets in southern Europe.
Black Sea in the Ukraine war
- Russia has been making efforts to gain complete control over the Black Sea since the Crimean crisis of 2014.
- During the ongoing invasion, the domination of the Black Sea has been a major Russian objective, along with the land bridge to connect Russia and Crimea.
- As such, there have been intense efforts to capture Mariupol, the Sea of Azov port in the breakaway eastern Ukrainian oblast of Donetsk.
- ABHYAS:
- Context:
Recently, India successfully tested the indigenously-designed Abhyas – a High-speed Expendable Aerial Target (HEAT) – in Odisha.
- The trial was carried out by the Defence Research and Development Organisation (DRDO) from the Integrated Test Range (ITR) in Odisha’s Chandipur.
Relevance:
GS III- Defence Technology
Dimensions of the Article:
- About ABHYAS
- Features of ABHYAS
- Uses of ABHYAS
About ABHYAS:
- Created and designed by the DRDO’s Aeronautical Development Establishment (ADE).
- Under DRDO, ADE is a significant Aeronautical Systems Design Laboratory.
- It is involved in the design and development of the state-of-the-art Unmanned Aerial Vehicles (UAV) and Aeronautical Systems and technologies to meet the requirements of the Indian Armed forces.
Features of ABHYAS:
- It is powered by a gas turbine engine to sustain a long endurance flight at subsonic speed.
- It is equipped with a MEMS (Micro-Electro-Mechanical Systems)-based Inertial Navigation System (INS) for navigation along with the Flight Control Computer (FCC) for guidance and control.
- The vehicle is programmed for fully autonomous flight and their check-out is done using a laptop-based Ground Control Station (GCS).
- Abhyas system is equipped with Radar Cross-Section (RCS) and infrared signatures which can be used to simulate a variety of aircraft for the practice of anti-aircraft warfare and also for the testing designed to target aerial targets.
Uses of ABHYAS:
- It will be used as a target for the evaluation of various missile systems.
- It offers a realistic threat scenario for practice of weapon systems.
