THE HINDU EDITORIAL : JUNE 7, 2018
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THE HINDU EDITORIAL : JUNE 7, 2018
THE HINDU EDITORIAL like many other sections will be the imperative one to crack the forthcoming exams like SBI PO 2018, SBI Clerk 2018 and DENA BANK PO Exam 2018. Learn new vocabulary words routinely.
a) Pre-emptive strike: on RBI’s repo rate hike
At the end of an unusually long three-day meeting, the Monetary Policy Committee of the Reserve Bank of India opted for a hike in key interest rates by 25 basis points — the first such increase in four and a half years. This hike, the first during this NDA government’s tenure, was approved unanimously by the six-member committee, citing worries about hardening inflation trends and a firming up of growth recovery at home. Global uncertainties affecting emerging markets in particular have played a role as well — be it rising tensions over trade wars initiated by the Donald Trump administration or the strengthening dollar or further rate hikes by the Federal Reserve that could strengthen the exodus of global capital from emerging markets such as India. Already, between January and May, outflows from foreign portfolio investors have reached their highest level in 10 years, and by June 4, $6.7 billion was pulled out on a net basis from the domestic capital market. The rupee, along with other emerging market currencies, is hurting too, but RBI Governor Urjit Patel dismissed suggestions that the rate hike was a bid to stem outflows. The MPC, he asserted, is driven purely by its inflation management mandate, and there is no contradiction between the rate hike and the committee sticking to its neutral policy stance. To be sure, while retaining its growth projections for 2018-19 at 7.4%, the MPC has revised upwards its inflation projections for the year since its April meeting — from 4.7-5.1% in the first half and 4.4% in the second half to 4.8-4.9% and a significantly higher 4.7%, respectively. This should worry a government gearing for parliamentary elections next year. Though seasonal food inflation spikes are delayed, input cost pressures have hardened owing to a spurt in global commodity prices, led by fuel. Moreover, inflationary expectations among producers as well as consumers have gathered steam. Crude oil prices have been the biggest factor at play, rising 12% from $66 a barrel when the MPC met in April to $74 a barrel. The committee said this rise is “sharper, earlier than expected and seems to be durable”, and termed it a major upside risk to its earlier inflation projections. Industry has expressed concern, but effective borrowing rates and bond yields had been firming up even before this rate hike. The government has, surprisingly, welcomed the RBI’s stance as one that could help steady the markets and dampen uncertainties. The RBI’s neutral stance, as Mr. Patel pointed out, allows it to keep all options open. But a reversal in rates is unlikely till global headwinds clear up and the mandarins in New Delhi work out a viable strategy to minimise the inflation transmission from global oil prices that is exacerbated by their taxation policy for fuels.
b) Defend the deal: on Iran nuclear deal
Iran’s notification to the UN that it would launch a plan to increase its uranium enrichment capacity illustrates the risks associated with the U.S. withdrawal from the nuclear deal last month. The Joint Comprehensive Plan of Action, reached among the five permanent members of the UN Security Council, besides Germany, the European Union and Iran, in 2015, curtailed Tehran’s nuclear programme in return for the lifting of international sanctions. But after President Donald Trump withdrew the U.S. from the agreement and threatened to impose new sanctions on Iran, its survival is in question. For now, the other signatories say they remain committed to the agreement. But almost a month after Mr. Trump announced his decision, they are yet to come up with a framework to salvage the deal. The latest Iranian announcement is perhaps aimed at turning the heat up on European powers to come up with guarantees that the deal’s benefits will be in place even with U.S. sanctions. According to the deal, Iran can enrich uranium, but under tight restrictions. Iran now says it would open a centre for the production of new centrifuges at its Natanz facility, which could be used for enrichment. Tehran could argue that it is not technically violating the agreement as long as it does not produce centrifuges. But the move to open a production facility, that too soon after Supreme Leader Ayatollah Ali Khamenei called for preparations to speed up uranium enrichment, could be seen as a provocative step by the remaining parties to the agreement. Instead of such posturing, both Iran and Europe would do well to shift their focus to preserving the integrity of the agreement. If Europe remains politically committed to the agreement as it claims, there have to be proper measures to circumvent the impact of U.S. sanctions. It is not yet clear whether European companies will make any significant investments in Iran, or even continue to do business in the country, once U.S. sanctions start targeting them. Earlier, European countries had discussed providing companies that do business with Iran special financing from the European Investment Bank and passing legislation to protect them from U.S. sanctions — but no decision has been taken so far. The EU says it can create conditions for Iran to continue to benefit from the deal but is wary of giving any guarantee. Iran has made it clear that the U.S. withdrawal should not affect its oil exports and access to the SWIFT international bank payments messaging system. The way forward is to continue a dialogue to find an economic and legislative package that would shield European companies and Iranian economic interests from U.S. sanctions. For that, Europe has to assure Iran it will stand up to U.S. pressure, as Iran remains cooperative and compliant with the terms of the 2015 agreement.
WORDS/ VOCABULARY
1) Tenure
Meaning: The holding of an office.
Example: “his tenure of the premiership would be threatened”
Synonyms: Incumbency, Term
2) Citing
Meaning: To mention something because it proves an idea, explains why something happened, or is an example of what you mean.
Example: Johnson resigned from the board after just six months, citing “differences of opinion”.
3) Hardening
Meaning: (of prices of shares, commodities, etc.) rise and remain steady at a higher level.
Example: “if oil prices harden at the end of this century”
4) Firming up
Meaning: To make something more certain or less likely to change.
Example: Could we have a meeting so we can firm up the details of our agreement?
Synonyms: Planning, Expecting
5) Exodus
Meaning: A mass departure.
Example: “the annual exodus of sun-seeking Canadians to Florida”
Synonyms: Withdrawal, Evacuation
Antonyms: Arrival
6) Outflows
Meaning: A large amount of money, liquid, or people that moves or is transferred out of a place.
Example: “an outflow of foreign currency”
Synonyms: Discharge, Outflowing
7) Portfolio
Meaning: The position and duties of a Minister or Secretary of State.
Example: “he took on the Foreign Affairs portfolio”
8) Pulled out
Meaning: To stop being involved in an activity.
Example: As part of the restructuring plan we will be pulling out of all operations in mainland Europe.
9) Stem
Meaning: To stop something unwanted from spreading or increasing.
Example: These measures are designed to stem the rise of violent crime.
Synonyms: Stop, Curb
10) Asserted
Meaning: State a fact or belief confidently and forcefully.
Example: “the company asserts that the cuts will not affect development”
Synonyms: Declare, Maintain
11) Contradiction
Meaning: The statement of a position opposite to one already made.
Example: “the second sentence appears to be in flat contradiction of the first”
Synonyms: Denial, Refutation
Antonyms: Confirmation, Reaffirmation
12) Sticking
Meaning: To put something somewhere, especially in a not very careful way.
Example: She stuck her fingers in her ears so that she couldn’t hear the noise.
13) Retaining
Meaning: Not abolish or alter; maintain.
Example: “the rights of defendants must be retained”
Synonyms: Maintain, Continue
Antonyms: Abolish, Alter
14) Gearing
Meaning: The amount of money a company has borrowed compared to its share capital.
Example: You must look at the company’s gearing level and its ability to service its debt.
15) Spikes
Meaning: A sharp increase in the magnitude or concentration of something.
Example: “the oil price spike”
Synonyms: Increase, Rise
16) Spurt
Meaning: A sudden marked burst or increase of activity or speed.
Example: “late in the race he put on a spurt and reached second place”
Synonyms: Sprint, Rush
17) Inflationary
Meaning: Characterized by or tending to cause monetary inflation.
Example: “the Prime Minister came close to accusing the Chancellor of starting the inflationary spiral”
18) Steam
Meaning: Energy and momentum or impetus.
Example: “the anti-corruption drive gathered steam”
Synonyms: Energy, Vigour
19) Concern
Meaning: A cause of anxiety or worry.
Example: “environmental concerns”
Synonyms: Affair, Issue
20) Dampen
Meaning: Make less strong or intense.
Example: “nothing could dampen her enthusiasm”
Synonyms: Lessen, Decrease
Antonyms: Heighten
21) Headwinds
Meaning: A wind blowing in the opposite direction to the one you are moving in.
Example: The runners had to battle against a stiff/strong headwind.
22) Mandarins
Meaning: A powerful official or senior bureaucrat, especially one perceived as reactionary and secretive.
Example: “a civil service mandarin”
23) Viable
Meaning: Capable of working successfully; feasible.
Example: “the proposed investment was economically viable”
Synonyms: Workable, Feasible
Antonyms: Impracticable
24) Exacerbated
Meaning: Make (a problem, bad situation, or negative feeling) worse.
Example: “the exorbitant cost of land in urban areas only exacerbated the problem”
Synonyms: Aggravate, Worsen
Antonyms: Calm, Reduce
25) Enrichment
Meaning: An increase in the proportion of a particular isotope in an element, especially that of the fissile isotope U-235 in uranium, so as to make it more powerful or explosive.
Example: “a centrifuge plant for uranium enrichment”
26) Curtailed
Meaning: Reduce in extent or quantity; impose a restriction on.
Example: “civil liberties were further curtailed”
Synonyms: Reduce, Cut
Antonyms: Increase, Lengthen
27) Threatened
Meaning: Cause (someone or something) to be vulnerable or at risk; endanger.
Example: “a broken finger threatened his career”
Synonyms: Endanger, Intimidate
28) Impose
Meaning: Require (a duty, charge, or penalty) to be undertaken or paid.
Example: “a fine may be imposed”
Synonyms: Levy, Charge
29) Signatories
Meaning: A party that has signed an agreement, especially a state that has signed a treaty.
Example: “Britain is a signatory to the convention”
30) Salvage
Meaning: Retrieve or preserve (something) from potential loss or adverse circumstances.
Example: “it was the only crumb of comfort he could salvage from the ordeal”
Synonyms: Retain, Preserve
31) Heat up
Meaning: If a situation heats up, it becomes more extreme.
Example: With the political climate heating up, we can expect to hear a lot more from both candidates.
Synonyms: Severe, Extreme
32) Violating
Meaning: Break or fail to comply with (a rule or formal agreement).
Example: “they violated the terms of a ceasefire”
Synonyms: Breach, Infringe
33) Speed up
Meaning: An increase in the rate of change or growth.
Example: Measures should be taken to halt the speed-up in population growth.
Synonyms: Increasing, Intensifying
34) Provocative
Meaning: Causing anger or another strong reaction, especially deliberately.
Example: “a provocative article”
Synonyms: Annoying, Irritating
Antonyms: Soothing
35) Posturing
Meaning: Behave in a way that is intended to impress or mislead.
Example: “a masking of fear with macho posturing”
Synonyms: Pose, Strut
36) Preserving
Meaning: Retain (a condition or state of affairs).
Example: “a fight to preserve local democracy”
Synonyms: Continue, Conserve
Antonyms: Discontinue, Abandon
37) Circumvent
Meaning: Find a way around (an obstacle).
Example: “if you come to an obstruction in a road you can seek to circumvent it”
Synonyms: Avoid, Evade
38) Impact
Meaning: A marked effect or influence.
Example: “our regional measures have had a significant impact on unemployment”
Synonyms: Collision, Smash
39) Legislative
Meaning: Having the power to make laws.
Example: “the country’s supreme legislative body”
Synonyms: Judicial, Juridical
40) Stand up
Meaning: If an idea or some information stands up, it is proved to be true or correct.
Example: Their evidence will never stand up in court.
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