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Forex, interest rate traders turn cautious after Pahalgam terror attack
Suspected militants killed 26 men at a tourist destination in Kashmir on Tuesday in the worst attack on civilians in the country in nearly two decades. Indian Foreign Secretary Vikram Misri said that there was cross-border involvement in the attack.
New Delhi has suspended a six-decade old river-sharing treaty and closed the only land crossing between the nuclear-armed rivals.
A day after the attack, the Indian rupee recorded its worst performance in two weeks. The currency continued to weaken on Thursday, falling to 85.6625 against the US dollar.
Worries about New Delhi's response to the attack are leading to some unease, according to three bankers.
The Kashmir attack has played a role in the rupee's weakness, coupled with the recovery in the dollar index, a senior treasury official at a bank said.
However, it is difficult to quantify the exact impact of each factor on the rupee's decline, said the banker, who asked not to be identified as he is not permitted to speak to media.
Dollar/rupee forward premiums rose alongside the rupee's decline. Indian bonds fell and interest rate swaps hardened.
While the size of the moves "is not big by any measure", it reflects the uncertainty on what could unfold next, a forex and swap trader at a bank said.
India's 5-year overnight index swap rate has risen 12 basis points from Wednesday's low, while the 1-year OIS is up by about half that amount. Meanwhile, the 10-year India benchmark bond yield climbed to 6.36 per cent on Wednesday and held near that level on Thursday.
Alok Sharma, head of treasury at ICBC, anticipates the 10-year yield will stay above 6.30 per cent because of the caution following the attack. This sentiment is driving "more paying interest" in OIS and forward premiums, he said.
Kashmir has been at the heart of India-Pakistan animosity for decades and the site of multiple wars, insurgency and diplomatic standoffs.
The market was "reacting to uncertainty, not fundamentals," Manish Bhargava, CEO of Straits Investment Management, said.
"The path forward depends on how the situation unfolds."
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Hindustan Times
25 minutes ago
- Hindustan Times
Amid tariff war, Modi calls for embracing swadeshi
Amid the ongoing tariff war, Prime Minister Narendra Modi on Saturday called on citizens to adopt the spirit of 'swadeshi' and support locally-made products, stressing that true service to the nation lies in promoting indigenous goods, especially amid 'global economic uncertainties'. Prime Minister Narendra Modi and chief minister Yogi Adityanath upon the former's arrival to address a public meeting, in Varanasi on Saturday. (PTI PHOTO) He also invoked Lord Shiva's 'Rudra roop' (fierce form) to describe India's resolute action against terrorism, saying Operation Sindoor showcased the country's strength to the world and delivered a clear message that anyone who dares attack India will not be spared, not even in 'Pataal Lok'. He dedicated the success of the operation 'at the feet of Mahadev'. He was addressing a public meeting in Banauli village of Sewapuri area of his parliamentary constituency Varanasi where he laid the foundation stone and inaugurated development works worth around ₹2,200 crore. He also distributed the 20th installment of the PM KISAN Samman Nidhi worth ₹20,500 crore to over 9.70 crore eligible farmers nationwide. 'India is going to become the third largest economy in the world. It has to be vigilant about its economic interests. Welfare of farmers and small industries is paramount and the government is making every possible effort in this direction,' he asserted. 'Varanasi is a city of intellectuals', Modi said, adding, 'Today when we are discussing economic progress, I want to draw your attention to the prevailing global conditions. The global economy is currently facing multiple uncertainties and an atmosphere of instability and is surrounded by many apprehensions.' Emphasising that farmers, small industries, and employment for youth are the top-most priorities for the government, Modi said, 'The government is doing everything possible in this direction. But as citizens, we too have responsibilities.' Calling for a national movement to support local products, the prime minister said, 'This is not just about Modi saying it, every Indian should say this -- if we want India to become the third-largest economy, every political party and every leader, keeping aside their hesitations, must work in the nation's interest and awaken the spirit of swadeshi among the people.' He also urged people to be conscious consumers, saying, 'Whatever we buy, we should ask ourselves -- has an Indian toiled to make this? If it has been made by the sweat of our people, with their skills, that product is swadeshi for us. We must adopt the mantra of 'Vocal for Local'.' Making a special appeal to traders and shopkeepers, the prime minister said, 'At a time when the world is going through uncertainty, let us take a pledge to sell only swadeshi goods from our shops and markets. Promoting made in India goods will be the truest service to the country.' With the festival and wedding seasons approaching, the prime minister encouraged people to ensure that all new purchases are made in India. He recalled how many citizens changed their wedding plans from abroad to India after his earlier appeal. 'The feeling of swadeshi in every action will define our future. This will also be a true tribute to Mahatma Gandhi. Only through collective effort can we fulfil the dream of a developed India,' Modi said. First visit to Kashi after Op Sindoor The PM also said, 'I have come to Kashi for the first time after Operation Sindoor.' The prime minister accused the Congress of repeatedly insulting the valour of the armed forces and even terming 'Operation Sindoor' a 'tamasha' (spectacle). 'Can 'Sindoor' ever be a joke? They dared to insult the sacred mark of our sisters and the valour of our soldiers,' he said. 'My heart was filled with sorrow for the 26 people who lost their lives in the Pahalgam terror attack ... My promise to avenge 'Sindoor' of our daughters was fulfilled with blessings of Mahadev,' he said, adding, 'I dedicate the success of the operation at the feet of Mahadev.' The prime minister stressed that the 'unity of 140 crore countrymen' became the 'strength of Operation Sindoor'. 'Shiva means welfare, but when terrorism and injustice raise their ugly head, Mahadev takes his 'Rudra roop'. During Operation Sindoor, the world witnessed this very form of India,' the prime minister said, warning that 'whoever attacks India will not survive, even in Pataal Lok (netherworld)'. Taking a dig at the Opposition, Modi alleged that while the country was celebrating the success of Operation Sindoor, 'some people in our own country were troubled by it'. 'Congress and its allies are unable to digest the fact that India demolished terrorist hideouts inside Pakistan,' he said. 'Aren't you proud of Operation Sindoor? Aren't you proud that India destroyed terror bases (in Pakistan and PoK)?' the prime minister asked the gathering. He added, 'You all must have seen the visuals of how our drones and missiles precisely struck and reduced terrorist headquarters to rubble. 'Several air bases in Pakistan are still in ICU. While Pakistan's anguish is understandable, what's shocking is that Congress and Samajwadi Party leaders are also unable to cope with it.' Modi also attacked the Samajwadi Party (SP) for questioning the timing of Operation Mahadev, in which three Pahalgam attack terrorists were killed. 'One of their leaders asked in Parliament -- 'why were the attackers of Pahalgam killed now'. Should I call and ask Samajwadi leaders whether to strike now or later? Should we wait and let the terrorists escape?' Modi asked. 'These are the same people who, during their rule in Uttar Pradesh, gave clean chits to terrorists and withdrew cases against those involved in bomb blasts,' Modi claimed, adding that such parties are now disturbed because terrorists are being eliminated. 'This is 'Naya Bharat' (New India), which worships Lord Shiva but turns Kaal Bhairav against its enemies when needed,' the prime minister said. Modi stressed that Operation Sindoor has demonstrated India's indigenous defence capabilities to the world. 'The power of our locally developed missiles, drones and air defence systems was on full display (during Operation Sindoor). Our BrahMos missile instilled such fear in the enemy that people in Pakistan can't sleep peacefully even in their dreams.' Expressing pride as an MP from Uttar Pradesh, the PM announced that BrahMos missiles will soon be manufactured in Lucknow. The BrahMos unit in Lucknow was inaugurated on May 11. 'Weapons made in the UP Defence Corridor will become the backbone of India's military strength,' he said, asking the crowd if they felt proud of India's self-reliant defence capabilities. Issuing a stern warning, he declared, 'If Pakistan dares to repeat its mistakes, missiles made in UP will wipe out terrorists.' Launched on May 7 in response to the April 22 Pahalgam terror attack that claimed 26 lives, Operation Sindoor showcased calibrated, tri-services action targeting terror hideouts in Pakistan.
Time of India
an hour ago
- Time of India
Amid tariff threat, PM pledges to protect farmers, MSMEs & youth
Varanasi: Amid the tariff stalemate with the USA, Prime Minister Narendra Modi on Saturday sent a strong message to the world that protecting India's economic interest was paramount. Speaking in his parliamentary constituency on Saturday, the PM emphasised that the "top priority of the government remains the welfare of farmers, small industries and employment for youth." He reaffirmed the resilience of the Indian economy, saying that the country must remain vigilant about its economic interests and adopt 'swadeshi' products. "There is an atmosphere of global instability. All countries are focusing on their individual interests. India is going to become the third biggest economy in the world and this is why India will have to stay alert as far as its economic interests are concerned," the PM said, two days after UP President Donald Trump called India a 'dead economy'. CM Yogi Adityanath and two deputy CMs, Keshav Maurya and Brajesh Pathak were present on the occasion. Addressing a public gathering at Kalikadham in Sevapuri after transferring Rs 20,500 crore directly into the bank accounts of over 9.70 crore farmers as the 20th installment of the PM-Kisan Samman Nidhi scheme and inaugurating and laying the foundation of 52 projects worth around Rs 2,200 crore, the PM urged people to go 'Vocal for Local'. "Anyone who wishes good for the country and wants to see India become the third-largest economy must encourage this spirit of going local," he said. The PM urged traders to promote 'swadeshi' products, terming it a true national service, and appealed to citizens to use Indian-made goods during the upcoming festivals and wedding seasons. He also advised people to hold weddings in India instead of abroad, highlighting that many young people were already doing so. "Every choice we make in favour of 'Swadeshi' will shape the future of the country. With everyone's effort, the dream of a developed India will come true. From now on, let's pledge to buy and decorate our homes with only Indian-made products," he added. Modi highlighted his government's farmer-centric policies, stating that unlike previous governments, the BJP administration has fulfilled its promises to farmers, citing the PM-KISAN Samman Nidhi as a prime example. "When this scheme was launched, opposition parties like the Samajwadi Party and Congress left no stone unturned to mislead farmers by claiming that after the 2019 Lok Sabha election, it would be stopped and even the money transferred into the accounts of farmers would be taken back. However, Rs 3.75 lakh crore has been transferred directly to farmers' accounts so far," he said. In UP alone, 2.5 crore farmers have received over Rs 90,000 crore, while farmers from Kashi got Rs 900 crore, he added. Referring to the transparency maintained in the schemes of his govt, Modi said, "There are no cuts, commissions, or middlemen. We created a permanent system where there's no leakage and no one can steal the rights of the poor." Prime Minister Modi emphasized developing the most backward regions with his mantra of 'High priority to more backward'. He highlighted the newly approved PM Dhan Dhanya Agriculture Scheme, focusing on underdeveloped districts with low crop production and income. He said the govt will invest Rs 24,000 crore in this scheme to support farmers from 'lab to field' and 'seed to market' for their products. Massive investments are being made in irrigation, and under the PM Fasal Bima Yojana, over Rs 1.75 lakh crore in claims were already paid out to farmers. Modi also mentioned a record increase in the MSP for farmers. Emphasising the govt's focus on boosting women's participation in agriculture through initiatives like Lakhpati Didi and Drone Didi, he stated that the aim is to empower 3 crore rural women financially, with over 1.5 crore already becoming Lakhpati Didis. Taking a subtle dig at the opposition, the PM said: "Hearing these numbers, SP leaders might just hop on their cycles and run away. " Despite agriculture being a state subject, the Centre has taken proactive steps to enhance farmers' income and living standards by implementing beneficial schemes, PM Modi said. He praised banks for launching a mega campaign and holding fairs in villages across the country for KYC renewal of the account holders under the Jan-Dhan scheme on the completion of its 10 years of launching. Modi also marked the distribution of assistive devices under the Rashtriya Vayoshri Yojana to 2,000 Divyangs by handing over devices, including low vision glasses to Babli Kumari (visually impaired student), sports wheelchairs to Santosh Kumar Pandey and Vikas Kumar Patel, hearing aids to Kishun, and a motorized tricycle to Sita Kumari Pal (teacher). Union agriculture minister Shivraj Singh Chouhan joined the event virtually from Patna. Get the latest lifestyle updates on Times of India, along with Friendship Day wishes , messages and quotes !
Time of India
an hour ago
- Time of India
Jindal hopes for 8 trillion dollar economy in 6 years
Hubballi: India will achieve an eight trillion dollar economy in the next six years, Parth Jindal, managing director of JSW Cement Limited and JSW Paints said. Addressing the 97th Founders Day of the Karnatak Chamber of Commerce and Industry (KCCI) here on Saturday evening, Jindal said that Indians need not worry about the US President Donald Trump's statement regarding a dead economy. "The Indian economy is the fastest-growing one. Since we have 75% of the youth force, we need to create 20 lakh jobs per year, whereas we are currently creating 10 lakh. We have plenty of investment opportunities in the manufacturing sector, which can boost our economy," he opined. He presented the Vanijya Ratna Awards-2025 to Jayanth Ashok Humbarawadi of Belagavi, Prakash S Bafna and G Devaki Yogananda of Hubballi, Siddanna Nalwad of Koppal, Sharanabasappa Gudimani of Gadag, and Ravindrakumar Beknal of Kalaburagi. Get the latest lifestyle updates on Times of India, along with Friendship Day wishes , messages and quotes !
