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Economic impact of Rs 2,000 banknote recall very small: RBI governor



In his first public comment since the central bank announced the recall of Rs 2,000 notes on Friday, Reserve Bank of India (RBI) Governor Shakkanta Das on Monday said its impact on the economy would be “very small” as it is only Rs 10 .8% currency in circulation.

“Rs 2,000 notes are not normally used in any transaction. We conducted several informal surveys in various places in India and found that it is almost never used for transactions. Therefore, economic activity will not be affected,” Das said. He spoke about this with journalists on the sidelines of a meeting of the board of public sector banks.

However, he said that he could not comment on a possible increase in demand for gold and real estate as a result of the actions of the RBI, as it would depend on people.

However, the central bank has more than enough banknotes printed, and currency chests can meet any increased demand for lower denomination banknotes.

“Let me assure you that we have more than enough printed banknotes already available in the system, not only at the RBI, but also at the foreign exchange offices run by the banks. So the stocks are sufficient and there is no cause for concern,” he said.

He added: “The RBI monitors liquidity in the system on a daily basis and we are responding to that. Our repo operation last week was only aimed at solving the problems of such banks that did not have liquidity.”

However, the withdrawal of Rs 2,000 banknotes is part of RBI’s currency management operation.

“Even the circulation of 2,000 rupiah banknotes has fallen by about 50% from a peak of 6.73 trillion rupees to 3.62 trillion rupees,” he added.

However, it didn’t make it clear how long the high-value currency’s legal status would last past Sept. 30.

“We expect most of the notes to come back. Let’s see how many notes come back. And as we approach September 30th, we will make a decision at this stage. I cannot give a speculative answer about what will happen after September 30th. We didn’t say that legal tender is only valid until September 30,” he said.

However, the RBI will remain sensitive, especially to those who live or travel abroad. He said: “(There are) a lot of Indians living abroad or going on long trips abroad. There are elderly people who visit their children in the US for six months. There are many Indian youth with H1B visas who are working in the US and other countries. There are many Indians who live abroad.”

He added: “People who are abroad and in India, we will be sensitive to all the difficulties they face. We will study all the difficulties of living abroad and find a solution. This is my confidence.”

The Governor said that the RBI did not order any additional procedures for banks to deposit Rs 2,000 banknotes. “There is an established procedure for exchanging banknotes or depositing cash into an account in accordance with established rules. We told the banks to follow the existing mechanism,” he said.

Asked if large cash deposits would be subject to the RBI’s control or if there would be a cash limit, Das said the RBI does not review such deposits.

“Other agencies, such as the income tax department, will follow their normal procedure. The decision to make cash deposits over Rs 50,000 is left to other agencies. As you know, there is a reporting system for banks,” he added.

The question of whether the frequent withdrawal of banknotes will raise questions about the credibility of India’s currency system suggests that the currency management system is very reliable.

“Our exchange rate is one of the least volatile compared to peer countries. The exchange rate of the rupee against the dollar remained stable despite the crisis in the international financial market caused by the war in Ukraine and the collapse of some banks in advanced economies. The market exchange rate of the Indian currency is very stable and the security features of the new series of Mahatma Gandhi banknotes have not been violated. Thus, the integrity of our currency is preserved,” he added.

Asked if the proposal to withdraw the currency came from the government or the RBI, Das said these are internal processes that are not valid for the public.


The US needs minerals for electric vehicles. Everyone else wants them too.



For decades, a group of the world’s largest oil producers have had a huge impact on the US economy and the popularity of US presidents through their control of the world’s oil supply, and the decisions of the Organization of the Petroleum Exporting Countries determined how much US consumers pay. pump.

As the world shifts to cleaner energy sources, control over the materials needed to make that transition is still out of reach.

China currently dominates the global processing of critical minerals, which are currently in high demand for electric vehicle batteries and renewable energy storage. In an attempt to gain more power over this supply chain, US officials have begun negotiating a series of agreements with other countries to expand America’s access to important minerals such as lithium, cobalt, nickel and graphite.

But it remains unclear which of these partnerships will succeed and whether they can generate anything close to the supply of minerals the United States is projected to need for a wide range of products, including electric vehicles and solar energy storage batteries.

The leaders of Japan, Europe and other developed countries meeting in Hiroshima agree that the world’s dependence on China to process more than 80 percent of its minerals leaves their countries vulnerable to political pressure from Beijing, which has a history of using supply chains as weapons. during times of conflict.

On Saturday, G7 leaders reaffirmed the need to manage the risks posed by vulnerable mineral supply chains and build more sustainable sources. The United States and Australia have announced a partnership to share information and coordinate standards and investments to create more responsible and sustainable supply chains.

“From our perspective, this is a huge step — a huge step forward in our fight against the climate crisis,” President Biden said Saturday as he signed the deal with Australia.

But figuring out how to gain access to all the minerals the United States will need will still be a challenge. Many mineral-rich countries have poor environmental and labor standards. And while the G7 speeches emphasized alliances and partnerships, rich countries still compete for scarce resources.

Japan has signed a critical minerals agreement with the United States, and Europe is in the midst of negotiations. But, as in the United States, in these regions the demand for essential minerals to feed their own factories is much higher than the supply in abundance.

Kirsten Hillman, Canada’s ambassador to the US, said in an interview that allied countries have important industry partnerships, but they are also commercial competitors to some extent. “It’s a partnership, but it’s a partnership with a certain level of tension,” she said.

“This is a challenging economic geopolitical moment,” Ms. Hillman added. “And we’re all looking to achieve the same thing, and we’re going to work together to make it happen, but we’re going to work together to make it happen in a way that’s also good for our business.”

“We have to create a market for products that are made and created in a way that is in line with our values,” she said.

The State Department insisted on “mineral security partnership”, with 13 governments trying to encourage public and private investment in their critical mineral supply chains. And European officials are advocating the creation of a “buyers’ club” of critical minerals with the G7 countries that could establish certain common labor and environmental standards for suppliers.

Indonesia, the world’s largest nickel producer, has floated the idea of ​​teaming up with other resource-rich countries to create an OPEC-style producers’ cartel that will try to transfer power to mineral suppliers.

In recent months, Indonesia has also turned to the United States in search of a deal similar to the one between Japan and the European Union. Biden administration officials are considering whether to give Indonesia some sort of preferential access, either through an independent deal or through a trade framework the United States is negotiating in the Indo-Pacific.

But some US officials have warned that Indonesia’s lagging environmental and labor standards could allow materials to be imported into the United States that undermine the country’s nascent mines as well as its values. Such a deal could also spark fierce opposition in Congress, where some lawmakers have criticized the Biden administration’s deal with Japan.

Jake Sullivan, the national security adviser, hinted at these compromises in a speech last month, saying that negotiations with critical mineral producers would be necessary but would raise “difficult questions” about labor practices in those countries and American politics. broader environmental goals.

Whether America’s new agreements would take the form of a critical minerals club, fuller negotiations, or something else was unclear, Mr. Sullivan said: “Now we’re trying to figure it out.”

Cullen Hendricks, senior fellow at the Peterson Institute for International Economics, said the Biden administration’s strategy to create more secure international supply chains for minerals outside of China has so far been “a bit inconsistent and not necessarily sufficient to achieve that goal.”

Demand for minerals in the United States was largely stimulated by President Biden’s climate law, which provided tax incentives for investment in the electric vehicle supply chain, especially in the final assembly of batteries. But Mr. Hendricks said the law appears to have had more limited success in rapidly increasing the number of domestic mines that will supply these new plants.

“The United States cannot handle this alone,” he said.

Biden officials agree that getting a reliable supply of the minerals needed to power electric vehicle batteries is one of their most pressing concerns. US officials say global lithium supplies must increase 42 times by 2050 to meet growing demand for electric vehicles. Forecasts of the International Energy Agency By 2040, global demand for lithium is expected to grow 42 times.

While battery innovations may reduce the need for certain minerals, the world is currently facing serious long-term shortages by any estimate. And many officials say Europe’s reliance on Russian energy since the invasion of Ukraine has helped illustrate the dangers of dependence on foreigners.

The global demand for these materials is causing a wave of resource nationalism that could intensify. Outside the United States, the European Union, Canada and other governments have also introduced subsidy programs to better compete for new battery mines and factories.

Indonesia gradually tightened restrictions to export raw nickel ore, requiring it to be processed in the country first. Chile, a major lithium producer, has proposed nationalizing its lithium industry to better control resource development and use, as Bolivia and Mexico have done.

And Chinese companies are still investing heavily in acquiring mines and refineries around the world.

For now, the Biden administration appears wary of making deals with countries with more mixed labor and environmental records. Officials are exploring changes needed to build U.S. capabilities, such as speeding up mine permit processes, as well as closer partnerships with mineral-rich allies such as Canada, Australia and Chile.

The White House announced this on Saturday. planned to go to Congress add Australia to the list of countries where the Pentagon can fund critical mining projects, criteria that currently only apply to Canada.

Todd Malan, chief external officer for Talon Metals, which proposed a nickel mine in Minnesota to supply Tesla’s North American production, said the addition of a major ally like Australia, which has high production standards for the environment, labor rights and participation indigenous peoples. , to this list was a “smart move”.

But Mr Malan said expanding the list of countries that would be eligible for benefits under the administration’s new climate law beyond countries with similar labor and environmental standards could undermine efforts to develop a stronger supply chain in the United States.

“If you start opening doors to Indonesia and the Philippines or anywhere else where you don’t have common standards, we will see it as going against the spirit of what Congress has been trying to do by encouraging a domestic and friendly battery supply chain. He said.

However, some U.S. officials argue that the supply of critical minerals in rich countries with high labor and environmental standards will not be enough to meet demand, and that failure to strike new agreements with resource-rich countries in Africa and Asia could lead to The United States will be in a very difficult position. vulnerable.

While the Biden administration seeks to streamline the process of issuing permits for the construction of new mines in the United States, obtaining approval for such projects can still take years, if not decades. Automotive companies, which are major employers in the US, are also warning of a predicted shortage of battery materials and advocating arrangements that will give them more flexibility and lower prices.

The G7 countries, together with countries with which the US has free trade agreements, are estimated to produce 30 percent of the world’s lithium chemicals and about 20 percent of refined cobalt and nickel, but only 1 percent of natural flake graphite. Adam Megginson, Price Analyst at Benchmark Mineral Intelligence.

Jennifer Harris, a former Biden White House official who worked on the Critical Minerals Strategy, argued that the country should move faster to develop and authorize domestic deposits, but that the United States also needed a new basis for multinational negotiations that included countries that are major exporters of minerals.

The government could also create a program to stockpile minerals like lithium when prices fall, which would give miners more confidence to find a destination for their products, she said.

“There’s so much to do that it’s a world of both,” she said. “The problem is that yesterday we need to responsibly pull a lot more stones out of the ground.”

Jim Tankersley report provided from Hiroshima, Japan.

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JetBlue-America partnership rejected by federal court



A federal judge established a partnership between American Airlines and JetBlue Airways at New York and Boston airports, writing Friday in a ruling that the alliance would hurt competition and raise fares.

The decision is a big win for the Justice Department, which under President Biden has sought to more aggressively enforce antitrust laws, especially in industries such as air travel and technology, where a few companies are so dominant that it can be difficult, if not impossible, for small businesses. to challenge them. The judge ruled that the airline partnership known as the Northeast Alliance must end.

Under the agreement, effective in 2021, each airline sells seats offered by the other on certain routes. The airlines also share revenue from certain flights and gate access at airports. The alliance covers three major airports serving New York and Boston’s Logan International Airport.

The Justice Department said the cooperation reduces competition and will cost travelers hundreds of millions of dollars a year if it stays put. The airlines argued that the partnership provides consumers with more options to fly.

Endorsing the government, U.S. District Court Boston Judge Leo T. Sorokin wrote: “This makes the two airlines partners, each with a vested interest in the success of their joint and individual efforts, rather than vigorous, independent rivals regularly challenging each other in a competitive marketplace.” “.

JetBlue and American said in statements that they are considering their legal options. JetBlue said it was “disappointed with the decision”, while American called the decision “clearly wrong”. Both described the partnership as a “huge win” for clients.

For the Justice Department, “this is a big win,” said Gene Kimmelman, a fellow at the Harvard Kennedy School and the Yale Center for Economic Policy. Tobin, as well as a former employee of the Department of Justice. “This was a very important case for the department to show that the agreement was built as a merger that concentrates power at key hub airports by coordinating flight schedules and airline capacity.”

A series of mergers over the course of about two decades has significantly reduced the number of major airlines in the United States. In 2013, for example, American merged with US Airways. Previously, United and Continental Airlines became one company, and Delta Air Lines merged with Northwest Airlines. This has left travelers with fewer choices, especially at many hub airports, which tend to be dominated by one or two airlines.

Part of the Justice Department’s concern was that other airlines could also enter into partnership agreements, further limiting choice for customers.

The decision dealt a blow to JetBlue, which has been looking to expand rapidly in recent years. In addition to the alliance with American, JetBlue made a deal to buy Spirit Airlines. The Ministry of Justice asks the judge to block this acquisition as well.

JetBlue is the sixth largest airline in the US, with a 5.5% domestic market share, according to federal data. The American is the largest, with 17.6 percent.

In a lawsuit against the Northeast Alliance, the Justice Department argued that JetBlue had a disruptive effect on the industry by forcing larger, more established airlines to cut prices. JetBlue’s deal with American effectively eliminated a major competitor from several important markets, the department said.

More than 75 percent of all JetBlue flights last year flew to or from the four airports covered by the agreement, according to flight schedules tracked by Cirium, an aviation data company.

“While the defendants claim that their cooperation on the principle of “the more the better” will benefit passengers, they have presented a minimum of objective credible evidence to support this claim,” Judge Sorokin wrote. “Whatever the benefits to American and JetBlue in becoming more powerful—in the Northeast as a whole, or in their overall rivalry with Delta—such benefits come from an open agreement not to compete with each other.”

Airline share prices tumbled about 1.5 percent on Friday, but after the court ruling later in the day, additional selling pressure on the secondary market appeared to be negligible.

American and JetBlue have recorded significant market value gains this year, but both companies still have a long way to go before they recover from the pandemic’s devastating impact on air travel: American has lost about half its market value since early 2020, while Since then, JetBlue shares have fallen more than 60 percent.

In a lawsuit aimed at preventing a takeover of JetBlue Spirit, antitrust regulators have argued that JetBlue’s pursuit of the Northeast Alliance indicates that the airline is increasingly operating as a larger and more established carrier. Today, Spirit is even more disruptive to other airlines than JetBlue, which has “less reason to continue to compete aggressively” with the country’s largest airlines, the department said. The case is expected to go to court this year if it is not settled sooner.

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Center Issues Order to Take Control of Delhi Government Department of Services



Delhi expects a dry morning as humidity levels drop to 57%, according to IMD.

Overcast morning in Delhi, minimum temperature 25.4°C, air quality drops

Cool morning in Delhi but temperatures expected to rise to 40 degrees Celsius

Signs of recovery: Delhi Metro restores 90% of pre-pandemic ridership

Women can now work nights in factories in Delhi; Kejriwal government changes the rules

Railway approves purchase of 238 Vande Bharat Metro rakes for Mumbai

Adani-Hindenburg Saga: No Regulatory Violations Found, SC Commission Says

11 Javans were injured in a hurricane that hit a CRPF camp in the Bastar district of Chhattisgarh.

Government of Uttar Pradesh is the largest buyer of goods and services of the GeM portal in fiscal year 23

Retail inflation for farmers and rural workers eased slightly in April

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