Today's Headlines - 11 August 2023
MPC has kept interest rate unchanged
GS Paper - 3 (Economy)
Interest rates in the Indian financial system will remain unchanged following the decision of the Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) to keep the main policy instrument – the Repo rate – unchanged at 6.50 per cent on 10 August 2023. Equated monthly instalments (EMIs) of home, vehicle and other loans are expected to remain steady for the time being.
Why is the RBI in pause mode?
The pause in the Repo rate – the rate at which RBI lends money to banks to meet their short-term funding needs – on 10 August 2023 is for the third time since the RBI started hiking the Repo rate in May 2022 to check inflation.
In April policy, the MPC members, in a surprise move, had unanimously decided to pause the rate hike cycle.
Monetary policy transmission is still underway after the RBI slashed the Repo rate by 250 basis points since May 2022 and headline inflation is expected to remain above the five per cent level and even touch even 6.2 per cent in the second quarter of this year.
While the vegetable price shock may reverse quickly, possible El Nino weather conditions along with global food prices need to be watched closely against the backdrop of a skewed southwest monsoon so far.
Why RBI has hiked inflation projection and its impact
On 10 August 2023, the RBI revised its FY2024 inflation projection to 5.4 per cent from 5.1 per cent announced in June.
It said CPI inflation is expected to be at 6.2 per cent in the second quarter, 5.7 per cent in the third quarter and 5.2 per cent in the fourth quarter of FY2023-24.
This means the high policy rates will remain high for long and, therefore, a rate cut can be expected only in Q1 FY25.
The spike in tomato prices and the rise in cereal and pulses contributed to inflation. However, vegetable prices may see a significant correction.
Retail inflation (measured using the consumer prices index or CPI) had declined to an 18-month low of 4.3 per cent in May from 5.7 per cent in March, remaining under the RBI’s comfort zone of 2-6 per cent for two consecutive months.
However, inflation has picked up since then and it’s likely to rise in the range of 6-6.8 per cent in July from 4.81 per cent in June. The RBI is mandated to keep CPI at 4 per cent with a band of +/- 2 per cent.
Why has RBI retained the stance of withdrawal of accommodation?
The RBI has focused on its stance of ‘withdrawal of accommodation’ until all risks to inflation dissipate. An accommodative stance means the central bank is prepared to expand the money supply to boost economic growth.
Withdrawal of accommodation will mean reducing the money supply in the system which will rein in inflation further.
#upsc #news #headline #MPC #rate #economy #indian #financial #system #policy #EMI #RBI #bank #hiked #CPI #zone #withdrawal #level #monetary #committee #instalments #mode
MPC has kept interest rate unchanged
GS Paper - 3 (Economy)
Interest rates in the Indian financial system will remain unchanged following the decision of the Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) to keep the main policy instrument – the Repo rate – unchanged at 6.50 per cent on 10 August 2023. Equated monthly instalments (EMIs) of home, vehicle and other loans are expected to remain steady for the time being.
Why is the RBI in pause mode?
The pause in the Repo rate – the rate at which RBI lends money to banks to meet their short-term funding needs – on 10 August 2023 is for the third time since the RBI started hiking the Repo rate in May 2022 to check inflation.
In April policy, the MPC members, in a surprise move, had unanimously decided to pause the rate hike cycle.
Monetary policy transmission is still underway after the RBI slashed the Repo rate by 250 basis points since May 2022 and headline inflation is expected to remain above the five per cent level and even touch even 6.2 per cent in the second quarter of this year.
While the vegetable price shock may reverse quickly, possible El Nino weather conditions along with global food prices need to be watched closely against the backdrop of a skewed southwest monsoon so far.
Why RBI has hiked inflation projection and its impact
On 10 August 2023, the RBI revised its FY2024 inflation projection to 5.4 per cent from 5.1 per cent announced in June.
It said CPI inflation is expected to be at 6.2 per cent in the second quarter, 5.7 per cent in the third quarter and 5.2 per cent in the fourth quarter of FY2023-24.
This means the high policy rates will remain high for long and, therefore, a rate cut can be expected only in Q1 FY25.
The spike in tomato prices and the rise in cereal and pulses contributed to inflation. However, vegetable prices may see a significant correction.
Retail inflation (measured using the consumer prices index or CPI) had declined to an 18-month low of 4.3 per cent in May from 5.7 per cent in March, remaining under the RBI’s comfort zone of 2-6 per cent for two consecutive months.
However, inflation has picked up since then and it’s likely to rise in the range of 6-6.8 per cent in July from 4.81 per cent in June. The RBI is mandated to keep CPI at 4 per cent with a band of +/- 2 per cent.
Why has RBI retained the stance of withdrawal of accommodation?
The RBI has focused on its stance of ‘withdrawal of accommodation’ until all risks to inflation dissipate. An accommodative stance means the central bank is prepared to expand the money supply to boost economic growth.
Withdrawal of accommodation will mean reducing the money supply in the system which will rein in inflation further.
#upsc #news #headline #MPC #rate #economy #indian #financial #system #policy #EMI #RBI #bank #hiked #CPI #zone #withdrawal #level #monetary #committee #instalments #mode
Today's Headlines - 26 August 2023
Fukushima nuclear water release
GS Paper - 3 (Nuclear Energy)
Twelve years after the Fukushima nuclear meltdown, Japan is releasing the power plant’s cooling water into the ocean. Japanese officials say it’s safe, but experts are divided. It’s hard to have a purely fact-based discussion about Japan’s Fukushima water release plan. Due to several scandals and a lack of transparency, trust appears to be low in both TEPCO, the company that operated the now-defunct Fukushima-Daiichi nuclear power plant, and the Japanese government, with its close ties to the atomic energy industry.
Fukushima: Why is the water being released into the Pacific Ocean?
Storage tanks holding the cooling water at the ruined facility are full. Japan has had to cool the reactors at the nuclear power plant since they were destroyed during a catastrophic tsunami in 2011.
It takes 170 tons of cooling water per day to keep them cool. In addition, rain and groundwater have been seeping into the site. There are 1,046 storage tanks holding 1,343 million cubic meters of water.
Once the water has been filtered, it is considered safe and sent through a one-kilometer (0.62 mile)-long tunnel before being released into the Pacific Ocean — a process that will take an estimated 30 years to complete. The radioactive waste, meanwhile, will remain on land.
Is Japan allowed to release filtered cooling water into the sea?
Both Japan’s atomic agency and the International Atomic Energy Agency (IAEA) have approved the plan.
The IAEA said Japan had met international safety standards and that “discharges of the treated water would have a negligible radiological impact to people and the environment.
They said it had been common practice for nuclear power plants worldwide to release used cooling water into the ocean for decades routinely.
However, environmental and fishing experts, as well as neighboring states, have accused Japan of downplaying the level of radiation in the cooling water.
They are concerned about far-reaching ocean contamination, potential environmental damage, a fall in fishing revenue and loss of reputation.
How will the water be prepared before it’s released?
Before it’s released into the ocean, the contaminated cooling water and groundwater will be sent through a filter system called the Advanced Liquid Processing System (ALPS).
ALPS can filter 62 different radionuclides — radioactive elements — but can’t filter out the radioactive isotope tritium.
So, TEPCO wants to dilute the water until the concentration of tritium is reduced to about 1,500 Becquerel per liter or less than a fortieth of the national safety standard. A becquerel (Bq) is a unit that measures the rate at which radioactive material emits radiation or how many atoms in the material decay in a given time.
TEPCO says that if the levels of tritium remain too high after filtration, they will repeat the process before releasing the water.
How dangerous is tritium?
Tritium is a form of hydrogen that occurs naturally in Earth’s atmosphere. It is radioactive but far less dangerous than cesium-137 or strontium-90 — both of which are life-threatening.
It emits a weak beta particle that can be stopped by a sheet of plastic or human skin.
It’s a different story if strontium-90 gets into the human body: “Strontium is absorbed by the bones, and once it’s in the crystalline structure of the bones, you can’t get rid of it again.
#upsc #news #headline #fukushima #nuclear #energy #water #japan #meltdown #powerplant #coolingwater #dicussion #tepco #daiichi #pacificocean #facilityarefull #catastropic #tsunami #rain #groundwater #cubic #meter #kilometer #tunnel #radioactive #sea #discharges #enviroment #experts #radiation #level #ALPS #filtersystem #filtration #dangerous #tritium #hydrogen #strontium #particle #humanbody
Fukushima nuclear water release
GS Paper - 3 (Nuclear Energy)
Twelve years after the Fukushima nuclear meltdown, Japan is releasing the power plant’s cooling water into the ocean. Japanese officials say it’s safe, but experts are divided. It’s hard to have a purely fact-based discussion about Japan’s Fukushima water release plan. Due to several scandals and a lack of transparency, trust appears to be low in both TEPCO, the company that operated the now-defunct Fukushima-Daiichi nuclear power plant, and the Japanese government, with its close ties to the atomic energy industry.
Fukushima: Why is the water being released into the Pacific Ocean?
Storage tanks holding the cooling water at the ruined facility are full. Japan has had to cool the reactors at the nuclear power plant since they were destroyed during a catastrophic tsunami in 2011.
It takes 170 tons of cooling water per day to keep them cool. In addition, rain and groundwater have been seeping into the site. There are 1,046 storage tanks holding 1,343 million cubic meters of water.
Once the water has been filtered, it is considered safe and sent through a one-kilometer (0.62 mile)-long tunnel before being released into the Pacific Ocean — a process that will take an estimated 30 years to complete. The radioactive waste, meanwhile, will remain on land.
Is Japan allowed to release filtered cooling water into the sea?
Both Japan’s atomic agency and the International Atomic Energy Agency (IAEA) have approved the plan.
The IAEA said Japan had met international safety standards and that “discharges of the treated water would have a negligible radiological impact to people and the environment.
They said it had been common practice for nuclear power plants worldwide to release used cooling water into the ocean for decades routinely.
However, environmental and fishing experts, as well as neighboring states, have accused Japan of downplaying the level of radiation in the cooling water.
They are concerned about far-reaching ocean contamination, potential environmental damage, a fall in fishing revenue and loss of reputation.
How will the water be prepared before it’s released?
Before it’s released into the ocean, the contaminated cooling water and groundwater will be sent through a filter system called the Advanced Liquid Processing System (ALPS).
ALPS can filter 62 different radionuclides — radioactive elements — but can’t filter out the radioactive isotope tritium.
So, TEPCO wants to dilute the water until the concentration of tritium is reduced to about 1,500 Becquerel per liter or less than a fortieth of the national safety standard. A becquerel (Bq) is a unit that measures the rate at which radioactive material emits radiation or how many atoms in the material decay in a given time.
TEPCO says that if the levels of tritium remain too high after filtration, they will repeat the process before releasing the water.
How dangerous is tritium?
Tritium is a form of hydrogen that occurs naturally in Earth’s atmosphere. It is radioactive but far less dangerous than cesium-137 or strontium-90 — both of which are life-threatening.
It emits a weak beta particle that can be stopped by a sheet of plastic or human skin.
It’s a different story if strontium-90 gets into the human body: “Strontium is absorbed by the bones, and once it’s in the crystalline structure of the bones, you can’t get rid of it again.
#upsc #news #headline #fukushima #nuclear #energy #water #japan #meltdown #powerplant #coolingwater #dicussion #tepco #daiichi #pacificocean #facilityarefull #catastropic #tsunami #rain #groundwater #cubic #meter #kilometer #tunnel #radioactive #sea #discharges #enviroment #experts #radiation #level #ALPS #filtersystem #filtration #dangerous #tritium #hydrogen #strontium #particle #humanbody