GBPUSD reclaims $1.35 mark; Bank Of England stands pat on rates
The British pound extended sharp upside on Friday tracking mild weakness in dollar amid lack of activity as US markets were closed on June 19 in observance of Juneteenth. Meanwhile, Bank of England yesterday decided to keep interest rates unchanged after cutting it by a quarter-point last month. The Monetary Policy Committee voted 6-3 to hold the Bank Rate at 4.25%. Three members preferred to reduce the rate by 25 basis point. The central bank noted that there has been substantial disinflation over the past two years, as previous external shocks have receded, and as the restrictive stance of monetary policy has curbed second-round effects and stabilised longer-term inflation expectations. This has allowed the MPC to withdraw gradually some degree of policy restraint, while maintaining Bank Rate in restrictive territory so as to continue to squeeze out existing or emerging persistent inflationary pressures. For the day, investors await UK retail sales for May. Nevertheless, broad strength in dollar amid the ongoing Middle East turmoil could also limit gains the counter. GBPUSD is currently quoting higher by more than half a percent on the day at $1.3502. On the NSE, GBPINR futures are up 0.33% at 116.87.
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Hindustan Times
15 minutes ago
- Hindustan Times
From trade hub to backwater post-partition, what rail link means to Kashmir
When the Vande Bharat Express chugged from Katra on June 6 and arrived in Srinagar three hours later, crossing the 359-metre bridge over the Chenab river and the 11-km tunnel through the forbidding Pir Panjal range, it broke a physical and psychological barrier that symbolised Kashmir's isolation after the partition. India's division in 1947 hit Kashmir the hardest politically and economically, spawning a protracted conflict and reducing it to a backwater from the crossroads of commerce and the blending of cultures. The partition severed Kashmir's long-distance trade links to Central Asia and beyond, ending its significance as an economic hub and stagnating its economy. Overnight, Kashmir became dependent on a cart road to Jammu via the 2,739-metre Banihal Pass, in the Pir Panjal, with the closure of the Jehlum Valley Road to Rawalpindi in what is now Pakistan. In 1959, the Jawahar Tunnel's construction through the pass improved the connectivity. But the Jammu highway remains vulnerable to blockages due to landslides and snow. The closure of the tunnel, which was once Asia's longest, for extended periods would trigger a shortage of essential commodities in winter until a few decades ago. In 2013, the completion of India's longest and most challenging 11-km Pir Panjal tunnel marked a major milestone in providing a much-needed all-weather railway connectivity to Kashmir. But it would take another 12 years to realise the over a century old dream of completing the 272-km rail project in treacherous mountainous terrain to connect Kashmir with the national rail network. Prime Minister Narendra Modi flagged off the Katra-Srinagar train and inaugurated the world's highest single-arch rail bridge to mark the project culmination on June 6. A marvel envisaged during the British era, the project involved complex engineering and the construction of 38 tunnels and 943 bridges, including India's first cable-stayed Anji Khad rail bridge, overcoming inhospitable terrain and unstable rock formations in a seismically active zone. The rail link will cut the Delhi-Srinagar travel time from 24 to 13 hours, without motion sickness, nausea, dizziness, sweating, and vomiting passengers often experience during the long and arduous journey along the curvy accident-prone highway to Jammu with stretches known as khooni (bloody) and shaitaanee (satanic). It is expected to boost Kashmir's economic growth, especially the horticulture industry, and provide an all-weather transportation alternative to the Jammu highway, the only road link connecting the Valley with the outside world, although challenges remain. Cherries from Kashmir arriving in Mumbai on a train via Katra on June 1 in just 30 hours, compared to the days it would have taken by road, held out hope. Freight trains would not immediately run from Kashmir without the necessary infrastructure, and passengers face security detours at Katra before their onward journey. Also read: Vande Bharat train to Srinagar steaming ahead with good public response Yet the operationalisation of the rail link is a major boost to the region, which was once connected through a portion of the ancient cross-continental Silk Road and was a trading hub and meeting point of cultures. The Silk Road, one of the world's largest overland trade routes spanning 6,400km, connected Kashmir to China and Central Asia. Long-distance traders transported their goods on camels, horses, and yaks to and from places like Lhasa (Tibet) and Yarkand (Xinjiang). They traded in Chinese silks, Afghan silver cookware, Persian rugs, Tibetan turquoise, Mongolian saddles, European soaps, and helped transport ideas. The partition virtually left Jammu and Kashmir (J&K) with practically no road, railway, or air connectivity with the rest of India. The cart road through the Banihal pass remained shut during winter before the tunnel construction. It connected Kashmir to Lahore and Sialkot (now in Pakistan) until 1947. The award of Punjab's Gurdaspur to India at the last minute gave access to J&K through a dirt track of bridgeless tributaries and streams. The track allowed India to mobilise resources to drive out Pakistan-backed irregulars who marched to Kashmir in October 1947 with a plan to occupy an airstrip in Srinagar. An Indian Army contingent managed to land and secure the airstrip before the onset of the harsh Himalayan winter. Also read: Train to Srinagar, carrying hope Hari Singh, J&K's last king, dithered in acceding to India until October 1947 despite repeated requests, partly because of a lack of connectivity and his state's dependence on West Punjab (now in Pakistan) for essential commodities. The Jammu railway station was abandoned in 1947 with the Sialkot line closure. The Pathankot–Jammu broad-gauge line was laid in the 1970s. The new Jammu station was opened in 1972. It remained the closest railway station to Srinagar, around 300km away. The construction of the Jammu-Baramula rail link via Srinagar began in the 1990s. The Jammu-Udhampur-Katra and Baramula-Banihal segments were completed between 2005 and 2013. The Katra-Banihal segment completion marks a major leap in ensuring Kashmir's all-weather accessibility. The new wheels of progress promise a better future for a region with a storied past linked, however, to better and more open regional connectivity. Sameer Arshad Khatlani is the author of The Other Side of the Divide: A Journey Into the Heart of Pakistan. He works with Hindustan Times
Time of India
38 minutes ago
- Time of India
RBI Governor pushes for growth-backed policies as global uncertainty clouds India's investment outlook: MPC minutes
RBI Governor Sanjay Malhotra cautioned that rising global uncertainty could postpone business investment decisions. He noted that post-COVID recovery has been driven by public investments, with private sector investment remaining weak despite favorable conditions. Malhotra emphasized the necessity of implementing policies that actively support economic growth in the face of these challenges. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Growth and inflation outlook Tired of too many ads? Remove Ads Rising global uncertainty may cause businesses to delay investment decisions, Reserve Bank of India Governor Sanjay Malhotra said, stressing the need for policies that support economic growth , in his statement, released on Friday, as a part of the minutes of the Monetary Policy Committee (MPC) meeting.'On the investment front, the post-Covid recovery so far has been largely led by public investments, while private sector investments have been weak despite high capacity utilisation and improved corporate balance sheets. Moreover, heightened global uncertainties may put on hold investment decisions by businesses, underscoring the need for growth supportive policies,' Malhotra its June meeting, the MPC decided to cut the benchmark repo rate by 50 basis points to 5.5%. The committee expects that this dual-rate cut will significantly reduce lending rates, thereby, encouraging both investment and consumption, particularly in durable the decision, Malhotra said, 'It is expected that the front-loaded rate action along with certainty on the liquidity front would send a clear signal to the economic agents, thereby supporting consumption and investment through lower cost of borrowing.'The RBI had earlier indicated that investment activity is likely to improve, supported by higher capacity utilisation, better corporate balance sheets across both financial and non-financial sectors, and continued capital expenditure by the the overall investment landscape remains uneven. 'Domestically, the recovery of economic growth to 7.4% in Q4:2025 from 6.4% in Q3:2025 was a pleasant surprise. It helped to close the year 2024-25 with 6.5% growth overall. However, the recovery has not been broad-based. It was supported by the rural consumption and government capex. Private investment, especially in manufacturing, and urban consumption, have continued to remain subdued,' said MPC member Nagesh Kumar in his added, 'It is not clear that the growth momentum will continue in the Q1 of the current year, given the fact that consumption and investment growth is moderating. The survey of corporate performance shows that companies are deleveraging their balance sheets with rising profits. Despite the capacity utilisation crossing beyond 75%, the investment intentions in manufacturing have moderated in 2025-26. The difficult external environment is likely to further complicate the economic growth outlook for 2025-26, especially for the manufacturing sector outlook, with implications for job creation. It calls for supporting growth through both fiscal and monetary policy.'Despite the concerns around external volatility, the RBI's rate-setting panel in its June MPC meeting retained its GDP growth forecast for FY26 at 6.5%, with quarterly estimates holding economy grew at 7.4% in the March quarter, marking the fastest pace in the past four quarters. However, the full-year FY25 growth settled at 6.5%, slightly below the average of recent years. Governor Malhotra had acknowledged persistent external challenges such as geopolitical conflicts and changing trade policies, but remained confident in the domestic economic momentum, supported by a strong monsoon forecast and continued strength in the services central bank maintained its quarterly growth projections for FY26 at 6.5% in Q1, 6.7% in Q2, 6.6% in Q3, and 6.3% in Q4. 'Services sector is expected to maintain its momentum. However, spillovers emanating from protracted geopolitical tensions, and global trade and weather-related uncertainties pose downside risks to growth,' the MPC had added that the Indian economy is progressing well and largely in line with expectations, despite the headwinds from the global the inflation front, the RBI had revised its forecast downward for FY26 to 3.7%, from the earlier projection of 4% made in April. The downward revision came amid a sustained drop in price had highlighted that headline inflation fell to a nearly six-year low in April, driven by easing food prices and deflation in fuel. Core inflation remained stable despite global commodity market RBI's latest quarter-wise inflation projections were 2.9% for Q1, 3.4% in Q2, 3.5% in Q3, and 4.4% in Q4. The central bank had stated that risks to the inflation outlook were 'evenly balanced.'With inflation easing and the economy showing selective strength, the RBI and the MPC have chosen to support momentum while remaining cautious of evolving global dynamics.
Economic Times
42 minutes ago
- Economic Times
RBI Governor pushes for growth-backed policies as global uncertainty clouds India's investment outlook: MPC minutes
RBI Governor Sanjay Malhotra cautioned that rising global uncertainty could postpone business investment decisions. He noted that post-COVID recovery has been driven by public investments, with private sector investment remaining weak despite favorable conditions. Malhotra emphasized the necessity of implementing policies that actively support economic growth in the face of these challenges. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Growth and inflation outlook Tired of too many ads? Remove Ads Rising global uncertainty may cause businesses to delay investment decisions, Reserve Bank of India Governor Sanjay Malhotra said, stressing the need for policies that support economic growth , in his statement, released on Friday, as a part of the minutes of the Monetary Policy Committee (MPC) meeting.'On the investment front, the post-Covid recovery so far has been largely led by public investments, while private sector investments have been weak despite high capacity utilisation and improved corporate balance sheets. Moreover, heightened global uncertainties may put on hold investment decisions by businesses, underscoring the need for growth supportive policies,' Malhotra its June meeting, the MPC decided to cut the benchmark repo rate by 50 basis points to 5.5%. The committee expects that this dual-rate cut will significantly reduce lending rates, thereby, encouraging both investment and consumption, particularly in durable the decision, Malhotra said, 'It is expected that the front-loaded rate action along with certainty on the liquidity front would send a clear signal to the economic agents, thereby supporting consumption and investment through lower cost of borrowing.'The RBI had earlier indicated that investment activity is likely to improve, supported by higher capacity utilisation, better corporate balance sheets across both financial and non-financial sectors, and continued capital expenditure by the the overall investment landscape remains uneven. 'Domestically, the recovery of economic growth to 7.4% in Q4:2025 from 6.4% in Q3:2025 was a pleasant surprise. It helped to close the year 2024-25 with 6.5% growth overall. However, the recovery has not been broad-based. It was supported by the rural consumption and government capex. Private investment, especially in manufacturing, and urban consumption, have continued to remain subdued,' said MPC member Nagesh Kumar in his added, 'It is not clear that the growth momentum will continue in the Q1 of the current year, given the fact that consumption and investment growth is moderating. The survey of corporate performance shows that companies are deleveraging their balance sheets with rising profits. Despite the capacity utilisation crossing beyond 75%, the investment intentions in manufacturing have moderated in 2025-26. The difficult external environment is likely to further complicate the economic growth outlook for 2025-26, especially for the manufacturing sector outlook, with implications for job creation. It calls for supporting growth through both fiscal and monetary policy.'Despite the concerns around external volatility, the RBI's rate-setting panel in its June MPC meeting retained its GDP growth forecast for FY26 at 6.5%, with quarterly estimates holding economy grew at 7.4% in the March quarter, marking the fastest pace in the past four quarters. However, the full-year FY25 growth settled at 6.5%, slightly below the average of recent years. Governor Malhotra had acknowledged persistent external challenges such as geopolitical conflicts and changing trade policies, but remained confident in the domestic economic momentum, supported by a strong monsoon forecast and continued strength in the services central bank maintained its quarterly growth projections for FY26 at 6.5% in Q1, 6.7% in Q2, 6.6% in Q3, and 6.3% in Q4. 'Services sector is expected to maintain its momentum. However, spillovers emanating from protracted geopolitical tensions, and global trade and weather-related uncertainties pose downside risks to growth,' the MPC had added that the Indian economy is progressing well and largely in line with expectations, despite the headwinds from the global the inflation front, the RBI had revised its forecast downward for FY26 to 3.7%, from the earlier projection of 4% made in April. The downward revision came amid a sustained drop in price had highlighted that headline inflation fell to a nearly six-year low in April, driven by easing food prices and deflation in fuel. Core inflation remained stable despite global commodity market RBI's latest quarter-wise inflation projections were 2.9% for Q1, 3.4% in Q2, 3.5% in Q3, and 4.4% in Q4. The central bank had stated that risks to the inflation outlook were 'evenly balanced.'With inflation easing and the economy showing selective strength, the RBI and the MPC have chosen to support momentum while remaining cautious of evolving global dynamics.
