THE HINDU Editorial Vocabulary-December 8, 2016- Topic 1
The Reserve Bank of India
has surprised markets by opting to keep benchmark
interest rates unchanged and cutting the outlook for full-year growth in the
wake of last month’s decision to withdraw legal tender status to high
denomination currency notes. In the fifth bimonthly monetary policy statement,
the RBI cited a “backdrop of heightened uncertainty.” It listed global factors
including the imminent tightening of U.S. monetary policy and the rise in oil
prices, and “disconcerting” domestic inflation trends that could potentially
endanger its price stability goals. Expectations that the U.S. Federal Reserve
will resume its normalisation of policy by raising interest rates on December
14 have combined with a homeward-bound flight of capital from emerging markets
in the wake of Donald Trump’s win in the presidential election to buoy the dollar at the expense of other
currencies. The rupee has not been spared, forcing the RBI to intermittently
intervene to reduce volatility. Given that the exchange rate has the potential
to exert upward inflationary pressure as a bulk of the country’s commodity
imports, including crude oil, are largely paid for in dollars, the RBI had
little choice but to ensure that at least interest rates don’t end up being
another alibi for capital outflows. On the domestic front, food prices other
than those of vegetables are showing sustained firmness. More worryingly,
inflation excluding food and fuel has stubbornly displayed a “downward
inflexibility” that could, coupled with volatile energy costs and further
financial market turbulence, jeopardise the RBI’s end-March retail inflation
target of 5 per cent.
That the central bank has adopted a “wait and watch” approach in the wake
of the liquidity shock to the banking system sparked by the withdrawal from
circulation of about 86 per cent of the bank notes, is instructive. Trimming
its Gross Value Added (GVA) growth projection for 2016-17 by 50 basis points to
7.1 per cent, the RBI cited an unexpected loss of momentum in the second
quarter, particularly in industrial activity, and the impact from the
withdrawal of currency. The RBI observed that the currency replacement exercise
was likely to have the biggest impact on cash-intensive sectors. The resultant
disruptions could drag down growth in this fiscal and more data are needed
before conclusions can be drawn on the full impact and persistence of such an
impact. It is understandable therefore that the RBI has opted for caution.
Observing that economic growth could rebound strongly if the impact is
“transient” as widely expected, the central bank has for now chosen to hedge
its bets by reiterating an “accommodative policy stance”.
Vocabulary
Cited: summon someone to appear in a court of law.
Example: The summons cited four of the defendants
Synonyms: summon, summons, serve with a summons, serve with a
writ
Imminent: about to happen.
Example: They were in imminent danger of being swept away
Synonyms: impending, near, fast approaching, coming, forthcoming
Disconcerting: causing one to feel unsettled.
Example: He had a disconcerting habit of offering jobs to people he met at dinner
parties
Synonyms: unsettling, unnerving, discomfiting, disturbing, perturbing
Endanger: put someone or something at risk or in danger.
Example: He was driving in a manner likely to endanger life
Synonyms: imperil, jeopardize, risk, put at risk, put in
danger, expose to danger
Homeward: going or leading toward home.
Example: Their homeward journey
Buoy: an anchored float serving as a navigation mark, to show reefs or other
hazards, or for mooring.
Example: At Carval Rock we tie off to a mooring buoy bolted into the reef at 15m.
Synonyms: float, marker, bell buoy, nun buoy, sonobuoy
Alibi: offer an excuse or defense for (someone.
Example: Her friend agreed to alibi her
Synonyms: defense, justification, explanation, reason, story, line
Stubborn: having or showing dogged determination not to change one's attitude or
position on something, especially in spite of good arguments or reasons to do
so.
Example: He accused her of being a silly, stubborn old woman
Synonyms: obstinate, headstrong, willful, strong-willed, pigheaded, obdurate
Turbulence: violent or unsteady movement of air or water, or of some other fluid.
Example: The plane shuddered as it entered some turbulence
Disruption: disturbance or problems that interrupt an event, activity, or process.
Example: The schedule was planned to minimize disruption
Persistence: firm or obstinate continuance in a course of action in spite of difficulty
or opposition.
Example: Companies must have patience and persistence, but the rewards are there
Transient: lasting only for a short time; impermanent.
Example: A transient cold spell
Synonyms: transitory, temporary, short-lived,
ephemeral, impermanent