Rupee advances to 7-week high at 61.45 against dollar

Selling of the US currency by banks and exporters triggered by its weakness overseas helped the Indian rupee advance by 28 paise to a seven-week high of 61.45 against the dollar in late morning deals on Friday.

Good foreign capital inflows into equity market also boosted the rupee value against the dollar, a forex dealer said.

The rupee resumed lower at 61.85 per dollar as against the Thursday's closing level of 61.73 at the Interbank Foreign Exchange (Forex) Market on mild dollar demand from some banks.

However, it recovered immediately to 61.34 before quoting 61.45 per dollar at 1045 hours, on fresh selling by banks and exporters.

It may be recalled that the dollar was quoted at 61.32 on August 16, 2013.

The domestic currency hovered in a range of 61.34 and 61.95 per dollar during the morning deals.

In New York market, the dollar hit an eight-month low against the euro on Thursday as investors grew more concerned about the economic effects of a prolonged shutdown and debt-ceiling debate.

Meanwhile, the benchmark BSE index Sensex moved down by 29.66 points or 0.15 per cent to 19,872.41 at 1125hours, after earlier touching the 20K level.

BSE Sensex up in morning trade on sustained buying, Jet Airways shares gain

The BSE benchmark Sensex continued its rising sreak and was trading over 100 points in morning trade on Friday on sustained buying by funds as well as retail investors, ignoring a weak trend on the other Asian boures.

At 10.38 am, Sensex was up 93.11 points at 19995.18. Similarly, Nifty was up 33.95 points at 5943.65 during the same time.

The 30-share index gained 60.89 points, or 0.31 per cent, to trade at 19,962.96 points in early trade with auto, consumer durables, IT and realty sector stocks leading the rise. It had rallied over 522 points in the past two sessions.

On the similar lines, the wide-based National Stock Exchange index Nifty moved up 12.00 points, or 0.20 per cent, to 5,921.70.

Brokers said sustained buying by funds as well as retail investors took place as the partial US government shutdown eased fears about the Federal Reserve tapering its monetary stimulus programme soon.

Stocks of Jet Airways turned buyers' fancy and shot up by 3.60 per cent to Rs 400.50 after the Union Cabinet on Thursday night cleared its proposed sale of 24 per cent equity to Abu Dhabi-based Etihad.

In the Asian region, the Japan's Nikkei fell 0.90 per cent, while Hong Kong's Hang Seng shed 0.72 per cent in early trade.

The US Dow Jones Industrial Average ended 0.90 per cent lower in Thursday's trade.

Cabinet okays Telangana. Hyderabad to be joint capital for 10 years

The Centre Thursday took the first significant step towards creation of Telangana from southern Indian state Andhra Pradesh and decided that Hyderabad will be the joint capital of the two states for 10 years.

Over two months after the Congress Working Committee put its seal of approval, the Union Cabinet approved the proposal of the Home Ministry for creation of the 29th state and decided to set up a Group of Ministers (GoM) to work out modalities.

"The Cabinet has given its approval for the creation of a new state of Telangana," Home Minister Sushilkumar Shinde told reporters after the meeting that lasted more than two hours.

He said it was decided that Hyderabad will be the common capital of the two bifucated states for 10 years.

After the creation of the new state, the security and guarantees including fundamental rights of the people of coastal Andhra, Rayalaseema and Telangana will be ensured, he said.

The Cabinet approved a GoM that will go into the issue of a special financial disbursement that may be required from the central government for the residuary state of Andhra Pradesh, for building its capital and to cater to special needs of backward regions.
The new state will have a geographical area of 10 of the 23 districts of undivided Andhra Pradesh.

Thursday's decision brings to fruition the announcement made by the then Home Minister P Chidambaram on December 9, 2009 for creation of Telangana.

Joy & anger in Andhra Pradesh over Centre's nod for Telangana

Raghuram Rajan meets Chidambaram; discusses economic situation

Rajan discusses economic situation with Chidambaram

Ahead of the RBI's central board meet, the central bank chief Raghuram Rajan on Thursday met Finance Minister P Chidambaram and is understood to have discussed economic issues. "Our meeting was part of regular interaction that takes place between RBI and Finance Ministry," Rajan said after his hour long meeting with the Minister and Economic Affairs Secretary Arvind Mayaram. The Central Board of Reserve Bank will meet in Raipur on Friday to discuss key economic and financial developments. The RBI board meets at least once every quarter. The meeting would be chaired by Rajan. The four deputy governors are the official directors on the board, while Mayaram and Financial Services Secretary Rajiv Takru are the government nominees. There are also 11 non-official directors on RBI board. The meeting assumes significance in the wake of economic growth falling to a four year low of 4.4 per cent and current account deficit (CAD) at an elevated level of 4.9 per cent in the April-June quarter. While the government has been emphasising on measures for incentivising growth, the RBI in its policy review last month had hiked interest rates by 0.25 per cent. The RBI is scheduled to announce its second quarter policy review on October 29. Although Prime Minister Manmohan Singh and other government functionaries are expecting the growth to improve in the second half of this fiscal, Asian Development Bank in its recent report lowered India's growth projection for 2013-14 to 4.7 per cent. The economic growth rate slipped to a decade's low level of 5 per cent in 2012-13.

Remittances to developing world to reach $414 bn this year: World Bank

Developing world to get $410 bn in remittances

India and China would account for nearly a third of total remittances of $414 billion to the developing world this year, according to the World Bank. The total remittances to the developing world this year would be 6.3 per cent higher compared to 2012. "Remittance volumes to developing countries are projected to continue growing strongly over the medium term, averaging an annual growth rate of 9 per cent to reach $540 billion in 2016," the World Bank report also said. Global remittances, including those to high-income countries, are estimated to touch $550 billion this year, and reach a record $707 billion by 2016, the report added. World Bank Senior Vice President and Chief Economist Kaushik Basu said: "Remittances act as a major counter-balance when capital flows weaken as happened in the wake of the US Fed announcing its intention to rein in its liquidity injection programme. "Also, when a nation's currency weakens, inward remittances rise and, as such, they act as an automatic stabiliser." The estimates reflect recent changes to The World Bank Group's country classifications, with several large remittance recipient countries, such as Russia, Latvia, Lithuania and Uruguay no longer considered developing countries. The top recipients of officially recorded remittances for 2013 are India (with an estimated $71 billion), China ($60 billion), the Philippines ($26 billion), Mexico ($22 billion), Nigeria ($21 billion), and Egypt ($20 billion), World Bank said. Other large recipients include Pakistan, Bangladesh, Vietnam, and Ukraine. Growth of remittances has been robust in all regions of the world, except for Latin America and the Caribbean, where growth decelerated due to economic weakness in the US. The high cost of sending money through official channels continues to be an obstacle to the utilisation of remittances for development purposes, as people seek out informal channels as their preferred means for sending money home, World Bank said. The global average cost for sending remittances is 9 per cent, broadly unchanged from 2012, it added.