THE HINDU Editorial Vocabulary- November 21, 2016- Topic 2
Donald Trump’s surprise win in the U.S. presidential elections has lent the
dollar new wings. It has soared against most currencies, including the rupee,
on the expectation that his economic policies will spur growth and inflation in
the world’s largest economy. The prospect of the Federal Reserve raising
interest rates provided an updraught that helped the dollar extend a record
appreciating streak against the euro last week and pushed the rupee past 68 to
a dollar. In Congressional testimony last week, Fed Chair Janet Yellen
signalled that the central bank was close to a decision to raise rates again.
Some economists predict U.S. GDP growth could see appreciable acceleration in
2017 — with one projection positing even a doubling of the pace by the fourth
quarter — if the new administration delivers on some of its promises, including
tax cuts, deregulation and infrastructure spending. In fact, with a Republican
majority in both the House of Representatives and the Senate, Mr. Trump could
benefit from smoother Congressional backing for policy initiatives to boost
economic activity. U.S. stocks and bonds have also reflected the optimism over
the outlook for U.S. growth and prospects that increased fiscal spending will
help reflate the economy, with the S&P 500 Index adding gains for the second
straight week and benchmark bond yields climbing in anticipation of faster
inflation.
For the rupee, which has slumped 2.3 per cent from its 66.62 a dollar close
on November 8, the flight of capital from emerging market assets has inflicted
significant pressure that has been exacerbated by the Centre’s decision to
withdraw higher denomination currencies. Foreign institutional investors have
sold more than $2.5 billion of Indian equity and debt holdings so far this
month, compared with the about $1.5 billion they offloaded through October.
With the demonetisation move infusing a surge of liquidity into the banking
system, domestic interest rates are expected to decline, making the rupee less
attractive to investors seeking to benefit from an interest rate arbitrage. And
with consumption and broader economic activity predicted to take a hit on
account of the shortage of cash in the wake of the currency move, GDP growth
may slow sharply. That in turn could weaken overseas investor appetite for
rupee assets. The task before policymakers, and the monetary policy committee
that is set to meet on December 7, a week before the Federal Open Market
Committee’s rate decision, will be to reassure markets and investors that
India’s economy remains robust.
Vocabulary
Soared: fly or rise high in the air.
Example: The bird spread its wings and soared into the air
Synonyms: fly, wing, ascend, climb, rise, take off, take
flight
Spur: a thing that prompts or encourages someone; an incentive.
Example: Profit was both the spur and the reward of enterprise
Synonyms: stimulus, incentive, encouragement, inducement, impetus
Streak: an element of a specified kind in someone's character.
Example: There's a streak of insanity in the family
Synonyms: element, vein, touch, strain, trait, characteristic
Optimism: hopefulness and confidence about the future or the
successful outcome of something.
Example: The talks had been amicable, and there were grounds for optimism
Synonyms: hopefulness, hope, confidence, buoyancy, cheer, cheerfulness
Reflate: expand the level of output of (an economy) by government
stimulus, using either fiscal or monetary policy.
Example: Western
states pressured Schmidt to reflate the West German economy faster
Inflicted: cause (something unpleasant or painful) to be suffered by
someone or something.
Example: They inflicted serious injuries on three other men
Synonyms: administer to, deliver to, deal out to, dispense to, mete
out to
Surge: a sudden powerful forward or upward movement, especially
by a crowd or by a natural force such as the waves or tide.
Example: Flooding caused by tidal surges
Synonyms: gush, rush, outpouring, stream, flow; swell, heaving
Appetite: a natural desire to satisfy a bodily need, especially for
food.
Example: He has a healthy appetite
Synonyms: hunger, ravenousness, hungriness, taste, palate
Robust: strong and healthy; vigorous.
Example: The Caplans are a robust, healthy lot
Synonyms: strong, vigorous, sturdy, tough, powerful, solid, muscular