1. Prevent IMF bailout to Pakistan to repay Chinese debt
• Three influential US lawmakers have urged the Trump administration to oppose the proposed multi-billion bailout package being sought by Pakistan from International Monetary Fund. They have argued that the bailout package could be used to repay the Chinese debt accumulated under the China-Pakistan Economic Corridor (CPEC).
• In a letter to US Treasury Secretary Steven Mnuchin and Secretary of State Mike Pompeo, the bipartisan group of three lawmakers - Ted Yoho, Ami Bera and George Holding - expressed their deep concern over the likely use of the IMF`s bailout package. They said that China is investing 62 billion US dollars in Pakistan under the CPEC. They also pointed out that the CPEC`s debt repayment and profit repatriation terms are not transparent.
• The letter said that the impact of Chinese predatory financing in Pakistan, as already seen in the case of the Hambantota port in Sri Lanka, cannot be ruled out. It also said out that under Chinese pressure, Sri Lanka handed over 1,500 acres of land around the port for a 99-year lease.
• Noting that Pakistan`s history with the IMF gives further cause for concern, the US lawmakers said having spent 22 of the past 30 years in a dozen different IMF bailout programs, Pakistan has failed to carry out necessary structural economic problems.
2. CBDT rejects report which claims spike in number of I-T stop filers after demonetization
• Central Board of Direct Taxes (CBDT) has rejected media report which claimed that there had been a spike in the number of income tax stop filers in the year of demonetization. It has termed the report as false and baseless.
• In a statement, the CBDT said, it added 1.07 crore, new taxpayers, while the number of dropped filers came down to 25.22 lakh in 2017-18, showing the positive impact of demonetisation.
• Around 6.87 crore Income Tax Returns were filed during the financial year 2017-18 as compared to 5.48 crore filed during 2016-17. The CBDT asserted that the note ban had a positive impact on the widening of tax base and direct tax collections.
• An English daily had reported that there was an increase in the number of stop filers by almost tenfold in the year government demonetised high-value currency notes.
3. RBI issues norms for banks to set up currency chests
• Reserve Bank of India(RBI) has come out with guidelines for banks to set up new currency chests, which include minimum area of 1,500 square feet for strong room.
• The RBI said that the new chests should have a processing capacity of 6.6 lakh pieces of banknotes per day. It added that for those situated in the hilly/ inaccessible places, capacity should be 2.1 lakh pieces of banknotes per day.
• Earlier, a RBI appointed committee had recommended that the apex bank should encourage banks to open large currency chests with modern facilities and Chest Balance Limit (CBL) of at least Rs 1,000 crore.
4. Rupee appreciates by 12 paise against US dollar
• The rupee appreciated by 12 paise to 69.05 against the US dollar in opening trade driven by the weakening of the greenback in overseas markets and higher opening in domestic equities.
• Meanwhile, the benchmark BSE Sensex was trading higher by 195 to quote at 38,880 while the NSE Nifty was trading at 11,660 up by 62 points in the early trade.
• Firm global equity markets lent some support to the currency on the last trading day of this week. Equity benchmark indices in the US and Asia turned green amid positive updates on trade talks between the US and China, especially after China’s President Xi Jinping said substantial progress has been made in trade talks with Washington.
• Equity benchmark indices in India were also trading in the green with the Sensex gaining 163 points at 38,848 levels. The Nifty also rose 54 points to trade at 11,652 levels, on its way to reclaiming the key level of 11,700.
• The currency depreciated 76 paise as the Reserve Bank of India (RBI) seeded doubt regarding India’s economic growth concerns. Additionally, Fitch, a US-based credit rating agency, retained India`s sovereign rating at `BBB-`, the lowest investment grade, with the stable outlook, media reports stated.
• The agency in its report said that a weak fiscal position continues to constrain its rating. This is the 13th year in a row that global rating agency Fitch has rated India at `BBB-`. It had last upgraded India`s sovereign rating from `BB ` to `BBB-` with a stable outlook on August 1, 2006.
• On the global front, increased crude oil prices also fueled the fire. The international crude oil benchmark, Brent oil touched its key level of $70 per barrels in the first time since November 2018.