Appendices
1). Rupiah leads fall in Asian forex markets Bloomberg
Indonesia’s rupiah led the weekly drop in the Asian currency market after US jobs data fueled speculation the Federal Reserve will raise interest rates by the end of June. (1)
Strategists at HSBC Holdings Plc and Credit Suisse Group AG cut their rupiah forecasts after Bank Indonesia (BI) Senior Deputy Governor MirzaAdityaswara said March 6 the authority saw and undervalued currency being helpful for exports. (2)
The rupiah slid 1.7 percent from March 6, the steepest decline since the
five days ended Aug. 1, to Rp 13,193 a dollar as of 10:17 a.m.in Jakarta on Friday, prices from local banks compiled by Bloomberg show.(3) It reached
13,246 on March 11, the weakest since August 1998, and lost 0.1 percent from Thursday.(4)
“Bank Indonesia seems to be holding on to reserves for rainy days, so they
have a bigger tolerance for rupiah weakness,” said Dian AyuYustina, an economist at PT Bank Danamon Indonesia, “They’rewatching the rupiah’s performance relative to regional currencies, not just the dollar, to remain export competitive and narrow the current-account deficit.”(5)
The Indonesian currency has weakened 6.1 percent versus the greenback this year and declined against all its 10 major Asian counterparts, according to data compiled by Bloomberg.(6)
The rupiah’s one-month non-deliverable forwardsdropped 0.6 percent this week and 0.1 percent on Friday to 13,318 a dollar, the data show. (7) One-month implied volatility, a measure of expected currency swings used to price options, climbed 41 basis points, or 0.41 percentage point, from March 6 to 12.38 percent. (8)
A gauge of dollar strength climbed 1.2 percent this week after a March 6 report showed the US unemployment rate is the lowest it has been in almost seven years.(10) While monetary policy is set to tighten in the world’s largest economy, central banks across most of Asia are loosing, with South Korea and
Thailand giving both lowered borrowing costs this week. (11)
“It wasn’t an ideal week for Asian currencies”,saidNizamIdris, head of foreign-exchange and fixed-in-come strategy at Macquarie Bank Ltd. In Singapore.(12)The Fed “could take another step towards hiking interest rates at the March 18 policy meeting”, he said.(13)
The won slumped 2.5 percent this week, its biggest loss since 2011, princes compiled by Bloomberg show.(14) The rupiah fell 1.7 percent, the most in seven months, and Malaysia’s ringgit was 1.2 percent weaker as of 12:40 p.m in Hong Kong.(15) The Bloomberg-JP Morgan Asia Dollar Index, which tracks the region’s 10 most-traded currencies excluding the yen, slid this week to its lowest level since July 2010.(16)
The won snack to a 20-month low on Thursday as the Bank of Korea unexpectedly cut its seven-day repurchase rate to a record 1.75 percent.(17) Governor Lee Ju-yeolsaid policymakers had “decided to act preemptively” after inflation slowed to the least since 1999 in February and exports fell the most in two years. (18)
Thailand’s baht declined 0.8 percent this week, its biggest drop in five months. (19)The Bank of Thailand lowered benchmark borrowing costs on Wednesday for the first time in a year, joining a global wave of monetary easing after the Southeast Asian economy grew at its slowest pace in three years.(20)
2). Indian challenges old assumptions Harsh V. Pant
The US president’s visit to India in January as the chief guest at republic a new sense of dynamism in a relationship that was seemingly drifting in recent
years.(22) A weak government in Delhi coupled with Washington’s lack of interest in India continued to talk past the other. (23)
The possibilities engendered by the civilian nuclear agreement,
announced in 2005 and concluded in 2008, were a thing past with the bilateral relationship and unfulfilled expectations.(24)
Today the relationship stands on the there should of new possibilities, and much of the credit for this remarkable turnarround should go to India’s Prime Minister NarendraModi, who in a short eight months has given a new direction to Indian foreign policy.(25)
For a leader viewed as provincial before elections, Modihas shown great diplomatic agility, the sheer audacity with which he seems to challenge the foreign policy shibboleths of the past is striking. (26)The nonalignment ideologues in India stand confounded by the prime minister’s diplomatic successes.(27)
For years, the nation has been told that the only way the foreign policy establishment can secure Indian interest is by working within the rubric of non-alignment,even a recent template on how Delhi should conduct its foreign policy establishment was termed “Non-Alignment 2.0”.(28)
But today Indian foreign policy is being shaped by a government not trapped in the rhetoric of the past, busily in the rhetoric of the past, busilyengaging major global powers with a confidence not seen in previous
administrations.(29)
Defensiveness of the past is now replaced by an explicit acknowledgement of the convergence with key partners including the US.(30)
Thought Modiwas denied a US visa In 2005, his government boldly
cannot be managed without a productive Us-India relationship, and Modilost on
time in reaching out to Washington, agreeing on a September 2014 bilateral summit meeting with US President Barack Obama in Washington.(32)
Modishowed his trademark decisiveness in attempting to mend Indo-Us
ties, which had tapered off under his predecessor and underscored the significance of the United States in Indian foreign policy priorities.(33)
Though Modiwas denied a US visa in 2005, his government reached out
to washington after coming to power.(34)
Modicemented his reputation as a leader not only willing to stand up for Indian interest but also was readyto find ways to move forward with others after signing a pact on the sidelines of the East Asia summit in Naypyitaw in November, reassuring the United states that India was not opposed to World Trade Organization’s nearly-completedTradeFacilitation Agreement (TFA).(35)
The prime minister followed this with a surprising move when he invited a surprising move when he invited Obama to the 2015 republic Day celebrations– an invite traditionally viewed as a celebration of India’s closest diplomatic partnerships.(36)
Obama’s visit to India saw the who leaders trying to sort out issues ranging from the no clear deal had been held up for six years amid concerns over the liability for any nuclear accident.(37)
A great leap forward was made after Obama used his executive powers to
roll back the conditions that US authorities be allowed to monitor use of nuclear material purchased by India even from third countries and the US agreed to
India’s proposal to build a risk management insurance pool with a liability cap of
is billion rupees, or US$244 million, to provide cover to suppliers who shunned
the civil nuclear agreement over liability in the event of a nuclear accident.(38) Bilateral defense cooperation was also energized with the two states was
agreeing to extend the Defense Cooperation Agreement for another 10 years,
wasexpanding its scope by declaring partnerships on issues including
“technology transfers, trade, research, co-production and co-development”. (39)
and Technology Initiative (DTTI), originally launched in 2012, to promote technological collaboration and co-development of critical defense system ranging from anti-tank missiles to launch systems for aircraft carriers.(40)
There is an attempt underway to make the DTTI more operational and
result-oriented since its institutionalization in 2012, no major project emerged, but now scheduling has begun. (41)This is a major step forward and also ambitious, with talk of working groups on aircraft-carrier and jet-engine technologies.(42)
Apart from the US, the Modi government is trying to increase its scope for diplomatic maneuvering vis-à-vis China by building substantive ties with states like Japan, Vietnam, and Australia.(43)
This week Modiis visiting Indian Ocean Island nations–the Seychelles, Mauritius and Sri Lanka – offering military and civilian and shoring Up India’s credibility as a net security provider in a region where China’s dominance has
become significant in the last few years.(44)
At a time when the US Indian relationship is being viewed through the prism of strategic changes in the larger Asia-Pacific and Indian Ocean region, it’s striking how marginal Pakistan has become in relationship. (45)The nation was
not mentioned during the joint press conference of Modi and Obama.(46)
In their joint statement the two leaders merely reiterated their call for Pakistan to bring the perpetra-tors of the 2008 terrorist attack in Mumbai to justice even as they reaffirmed the need for joint and concerted efforts to disrupt
entitles such as Lashkar-e-Tayyiba, Jaish-e-Mohammad, D-Company and the Haqqani network.(47)
There is growing nervousness in Pakistan about the changing US role in South Asia.(48) Islamabad has moved quickly to reinforce its all-weather partnership with Beijing, and Chinese President XI Jinpingis likely to visit
Pakistan sometimes this year in what will be the first trip by a Chinese president XI Jinping head of state to the western neighbor in nine years.(49)
Underscoring its desire to play a more active role in South Asia, China
Taliban in peace negotiations. (50)Though there are tensions in the Sino-Pak bilateral relationship especially pertaining to the presence in Pakistan of the East Turkestan Islamic Movement, founded by separatists from the Uighur ethnic minority native to western Chinese region of Xinjiang, both, sides have an
interest in maintaining a viable partnership, especially as Us-India ties an orbital leap.(51)
Pakistan is also reaching out to new actors like Russia form which it
hopes to buy three dozen Mi-35 helicopters with trouble in Russia’s ties with the West and Moscow losing its privileged position in the Indian defense policy, new equations in South Asia won’t be too surprising. (52)
Under the Modi government, India charts new territory in its foreign policy, predicated on the belief that rather than proclaiming non-alignment as an end in itself, India needs deeper engagement with friends and partners to develop leverage in dealing with adversaries and competitors.(53)
