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Submerging markets: on falling rupee value

The increasing demand for the U.S. dollar is shaking currency markets across the globe
Emerging(प्रकट होना/उभरती) market economies continue to be in the spotlight(सुर्खियों) for the wrong reasons as their currencies resume their prolonged slide against the U.S. dollar. The Indian rupee weakened past the 71 mark for the first time ever on Friday, registering a loss of about 10% of its value against the dollar since the beginning of the year. This makes the rupee the worst-performing(सबसे खराब प्रदर्शन) currency in Asia. Other emerging market currencies, most notably the Turkish lira, the Argentine peso and the South African rand, have suffered(भुगतना/सहना) much larger losses owing(कारण/हेतु से) to a serious loss of confidence among investors. The Argentine peso, which has lost more than half of its value in 2018, for instance(घटना/उदाहरण), witnessed(देखा) a sharp(तीव्र) loss of more than 10% on Thursday alone. This happened despite a 15 percentage point increase(बढ़ना/विस्तार) in interest rates by Argentina’s central bank in order to stem the outflow of capital and shore(आधार/ किनारे) up the value of the currency. The Turkish lira, which has lost almost half its value this year, is another currency in the doldrums(उदासी/खिन्नता). The crises(संकट) in both Turkey and Argentina have been intensified (तीव्र होना/घनीभूत होना)by domestic economic issues. But the common factor underlying the wider(व्यापक) carnage(नरसंहार/कत्लेआम)among emerging market currencies is the increasing demand for the dollar across the globe. The tightening of liquidity in the West, with the U.S. Federal Reserve raising interest rates, has played a major role in the strengthening of the dollar since February this year. Investors who earlier put their money in emerging markets have recently preferred American assets, which now yield higher returns.

Such a widespread(बड़े पैमाने पर/प्रचारित) shift of capital across the globe owing to the variations(विविधताओं/परिवर्तन) in interest rates is normal whenever the global interest rate cycle turns. Emerging market countries, which earlier benefited from the easing of monetary (मौद्रिक)conditions in the West, are now feeling the pain of a return to monetary policy normalcy. This does not, however, mean that emerging market economies can simply blame external economic factors for the present turmoil in their currencies and hope for better times. The management of these economies has generally been far from ideal, particularly when it comes to hard-hit economies like Turkey and Argentina. The chief among the troubles of emerging market economies is higher domestic(आंतरिक/घरेलू ) inflation(मुद्रास्फीति) when compared to the economies in the West. It is only natural, then, that their currencies will slide in value over time against the dollar and other major Western currencies. Unless there is a drastic(प्रबलतीव्र/भीषण) change in emerging market monetary policy vis-à-vis the West, this is likely to be the case for a long time. The mandate (आदेश/अधिदेश)of emerging market central banks in the current scenario(परिदृश्य/कथानक)should be to let their currencies find their true value in a smooth manner.



Important vocabulary

Synonyms: deteriorate, endure, experience, get, go through
Antonyms: calm, please, soothe, surrender, yield

2. Intensified (तीव्र होना/घनीभूत होना
Synonyms: add to, aggravate, boost, build up, deepen
Antonyms: decrease, diminish, discourage, dull, halt

3. Domestic(आंतरिक/घरेलू )
Synonyms: private, calm, family, home, pet
Antonyms: alien, business, foreign, industrial, office

4. Scenario(परिदृश्य/कथानक)
Synonyms: plot, scheme, book, outline, pages

5. Drastic(प्रबलतीव्र/भीषण
Synonyms: dire, forceful, harsh, radical, desperate
Antonyms: nice, calm, collected, easy, mild

6. Variations(विविधताओं/परिवर्तन)
Synonyms: abnormality, alteration, change, deviation, discrepancy
Antonyms: agreement, harmony, sameness, similarity, stagnation

7. Carnage(नरसंहार/कत्लेआम)
Synonyms: bloodshed, butchery, crime, havoc, killing
Antonyms: peace

8. Widespread(बड़े पैमाने पर/प्रचारित) 
Synonyms: across the board, all over the place, boundless, broad, common, comprehensive
Antonyms: concentrated, limited, local, narrow




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