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India lifts rate to pre-pandemic level to fight inflation

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Bloomberg – India’s central bank delivered its third straight interest-rate increase since May in an effort to return inflation to target and fend off further attacks on the currency. Bond yields and the rupee rose.

The repurchase rate was raised by 50 basis points to 5.40% Friday, a level last seen before the Covid-19 pandemic, as forecast by 16 of 36 economists surveyed by Bloomberg. The Reserve Bank of India’s six-member rate-setting panel voted unanimously on the decision, while sticking with its resolve to withdraw accommodation.

Sovereign bonds declined after the hike, which most economists had expected to be less than a half-point. The 10-year yield rose 10 basis point to 7.26%. The rupee was up 0.5% at 79.0713 to a dollar.

“Inflationary pressures are broad based and core inflation remains elevated,” Governor Shaktikanta Das said in an address from Mumbai, adding that inflation is expected to remain above the tolerance level. The RBI targets inflation at 2%-6%.

Friday’s move mirrors the Federal Reserve-led global tightening of interest rates to rein in consumer-price gains, caused in part by supply snarls and energy price shocks following the war in Ukraine. Although global commodity prices are showing signs of softening, any immediate pass-through in India appears unlikely even as a weaker rupee and uneven monsoon rains cloud the outlook for prices.

“The MPC stressed that sustained high inflation could destabilize inflation expectations and harm growth in medium term,” Das said, while retaining the forecasts for economic as well as price growth for the current fiscal year.

RBI’s cautious view on inflation is justified on uncertainty on monsoon performance and sustainability of commodity price correction, said Anubhuti Sahay, Mumbai-based South Asia chief economist at Standard Chartered Plc. “We see terminal repo rate at 6% by end of 2022.”

Das said the RBI will remain watchful and maintain the stability of rupee. India’s currency fell nearly 7% year-to-date on foreign fund outflows and record trade deficit.



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Akuregoda double murder: Suspected gunman in custody a duly discharged ex-soldier

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The police have arrested one of the two gunmen involved in the killing of Attorney-at-Law Buddhika Mallawarachchi and his wife, at Akuregoda, on 13 February. The suspect has been identified as a legally discharged soldier.

A team of the Homagama Divisional Crime Investigation Bureau personnel apprehended the ex-soldier at Delduwa, Ambalangoda, on Saturday, around 6.20 p.m. Sources said that the suspect, identified as drug addict, had admitted that he was the one who fired the T-56 assault rifle in the attack. The other attacker used a pistol. He is still at large.

Police identified the suspect in custody as a 46-year-old resident of Baddegama. He made use of a general amnesty offered to deserters, after the conclusion of the war, to secure legal discharge. He was with a friend at Delduwa, Ambalangoda, and worked on a nearby cinnamon estate.

The suspect has been detained under PTA and the police given the power to hold him for 90 days.

The police recovered his mobile phone.

The killers arrived at Akuregoda, in a car, and fled the area after killing the couple. The ex-soldier had got off the car, near Kottawa, and then took a bus to Dehiwala, from where he proceeded to Ambalangoda.

Under interrogation, the suspect has revealed that he carried out the hit on a contract given by Karandeniye Sudda, a notorious underworld figure, who paid him Rs 1 mn and provided a quantity of heroin.

The ex-soldier is among nine persons taken into custody in connection with the ongoing investigations into the Akuregoda double murder.

Among those taken into custody are two brothers from Athurugiriya who allegedly transported one of the firearms used in the killing and provided information about the lawyer’s vehicle. Another person, identified as “Polgasowita Dila,” believed to have coordinated the Akuregoda hit, was also taken into custody during preliminary investigations.

The Police Special Task Force’s Southern Province Special Operations Unit arrested six more suspects over the weekend at Ethkandura, Kahaduwa, for aiding and abetting the double murder

Investigations have further revealed that the individual, who moved the gunman to a hotel in Pannipitiya, had fled to Thailand, via the Bandaranaike International Airport (BIA).

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Those who hid under beds fearing Gotabaya, now talking big: Justice Minister

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Justice Minister Harshana Nanayakkara said in Parliament on Friday that some Opposition politicians who had not even dared to mention the name of Gotabaya Rajapaksa during the Rajapaksa era were now acting like heroes.

Minister Nanayakkara said so when SJB Kalutara District MP Ajith P. Perera asked whether the government would reopen cases against Gotabaya Rajapaksa, who no longer enjoyed presidential immunity. The former UNP Deputy Minister asked the Justice Minister whether the NPP, as promised during the polls campaign, had resumed hearings into 42 cases filed against the Rajapaksas and others.An irate Minister Nanayakkara said that those who had been under their beds those days were now acting as if they were heroes. He refused to answer MP Perera’s question. (SF)

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Demand for accommodating Thimphu principles in promised Constitution: ITAK says it was not party to that move

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Sumanthiran

The Illankai Thamil Arasu Kadchi (ITAK) was not party to a recent move by the Tamil National Council (TNC) to reive the 1985 Thmphu principals in a bid to make a joint proposal to the NPP government. This has been recently discussed at a recent meeting in Jaffna with the participation of Gajendrakumar Ponnambalam. The TNC is of the view that the proposed new Constitution should take Thimphu principles into consideration to pave the way for a federal structure.

When The Island sought ITAK’s response to the TNC’s move, top party spokesman M. A. Sumanthiran, PC, yesterday (22) said that his party had not taken part in that discussion.

Following Thimphu talks, the then terrorist groups, including the LTTE, demanded the recognition of the Tamils as a nation, the existence of a Tamil homeland, the right of self-determination of the Tamil nation and the right to citizenship and the fundamental rights of all Tamils.

The Democratic Tamil National Alliance (DTNA), affiliated with the TNC and the major northern political group ITAK, hadn’t participated in the 15 February talks, where a consensus was reached to pursue the Thimpu initiative. Previously known as Tamil Democratic National Alliance (TDNA), it was specially formed in 2008 to contest Provincial Council elections in the East. PLOTE and TELO are the main constituents of the DTNA.

Other Tamil sources said that basically all North based political parties, regardless of their attendance or absence at the recent talks, initiated by TNC, were of the view that the unitary status should be done away with to pave the way for federal structure.

Recently, JVP General Secretary Tilvin Silva declared that the preliminary work related with formulation of a new Constitution was underway.

by Shamindra Ferdinando

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