Indian currency notes of Rs 2,000, Rs 500 and Rs 200 denominations.
Nasir Kachroo | NurPhoto | Getty Images
The Indian rupee has been one of the most stable currencies in Asia-Pacific this year, but its stability is expected to be short-lived, according to UBS.
Strategists from the Swiss investment bank said in a note dated Aug. 25 that they expect the Indian currency to weaken to 77 per dollar by the end of the year — more than 5% weaker than current levels — and depreciate further to 79.5 by September 2022.
“We see the year-to-date INR stability as short-lived,” UBS said, adding that a retreat in U.S. bond yields lent stability to currencies like the rupee.
The rupee changed hands at around 72.98 per dollar on Friday, strengthening some 0.19% from January levels and appreciating from levels around 74.11 last month.
The rupee’s resilience has been primarily driven by two factors, according to Gaurang Somaiya, a foreign-exchange analyst at the Mumbai-based diversified financial services firm Motilal Oswal.
“First, consistent fund flows was positive for the rupee and second was the [Reserve Bank of India] bought dollars to build its reserves and prepare itself for any volatility,” he told CNBC.
Somaiya added that fund flows were not only led by the foreign institutional investors but also through a consistent stream of foreign direct investments.
FDI equity inflow into India grew 168% on-year to $17.57 billion between April and June — the first quarter in India’s fiscal year 2022. That refers to foreign money invested into Indian markets as well as businesses and is free of debt.
“Fund flows have been one of the major reasons that helped the rupee gain steadily,” Somaiya said. He pointed out that between August last year and now, the rupee has been stuck in a relatively broad range of 72 and 75 against the dollar.
That suggests the RBI has been “very active in managing the volatility of the rupee,” using its interventions to build up its foreign exchange reserves to near all-time highs, he said. Latest data showed the RBI had about $616.9 billion in foreign exchange reserves as on Aug. 20.
Somaiya said he expects the rupee to appreciate in the near term, following sharp gains in the domestic stock market. He predicted the currency could appreciate to levels near 72.20 against the dollar by the end of the year. In 2022, he expects the rupee to trade around the 73.50 to 74 level as the U.S. currency strengthens.
Last year, India recorded a current account surplus for the first time in over a decade due to a collapse in domestic demand for imports as a result of the pandemic. That implied the value of incoming goods, services and investments into India was lower than the amount that left the country.
In the first three months of this year, India’s current account deficit widened to $8.1 billion, or 1% of GDP, as the economy slowly recovered.
UBS strategists said India’s quarterly current account balance has deteriorated rapidly from last year, driven by a rebound in oil prices.
“Given our expectations for India’s current account deficit to persist in a 1-1.5% range into 2022, we expect the [rupee] to come under pressure when US yields start to rebound toward 2% by year-end,” they said.
British investment bank HSBC has a more positive view on the Indian currency. It expects the rupee to reach 73 against the dollar by year-end and says the currency will likely end flat with its end-2020 level. In the longer term, the bank expects modest weakness where the rupee could weaken to 75 against the dollar.
HSBC expects the rupee to hold up “relatively well” in a stronger dollar environment as persistent FDI inflows and better foreign-exchange reserves will help the currency withstand external headwinds, Madan Reddy, Asia foreign-exchange strategist at HSBC Global Research, told CNBC.
“The uncertainty around slowing sequential global growth and the Fed’s policy normalisation should therefore leave the [rupee] as an outperformer in Asia,” he said.
U.S. Federal Reserve chair Jerome Powell last month indicated that the central bank is likely to begin withdrawing some of its easy-money policies before the end of the year, though he still sees interest rate hikes off in the distance.
Reddy said the likelihood of tighter monetary conditions in the U.S. and a re-widening of India’s current account deficit point to a higher dollar/rupee pair. But, he added, excessive weakness in the rupee is less likely as the RBI would eventually remove excess liquidity conditions from the economy and restrain inflation expectations.
He pointed out the central bank’s foreign-exchange purchases in recent years have helped suppress longer-term depreciation expectations among local traders.
“In our view, the RBI’s FX policy will continue to remain a key driver of rupee’s performance,” Reddy said, adding that he sees little incentive for the central bank to tolerate the rupee’s strength as long as capital inflows are not broad-based.
“For now, the RBI seems to be comfortable with [dollar/rupee] oscillating within its year-to-date trading range of 72.5-75.5,” he said.
Motilal Oswal’s Somaiya added that domestic factors like growth recovery are more in favor of a stronger rupee, but global factors could cap gains against the dollar.
Crew cupola window view in orbit
The first look at the crew in orbit, from left: Jared Isaacman, Hayley Arceneaux, Chris Sembroski, Sian Proctor.
Inspiration4, which launched with Elon Musk’s SpaceX on Wednesday evening, shared the first photos from day one in orbit and gave an up-close look at the expansive views of Earth from the spacecraft’s “cupola” window.
The crew spent its first day in orbit floating in zero gravity inside the capsule, taking photos from the Crew Dragon window and spoke to patients of St. Jude Children’s Research Hospital, answering questions from space.
The historic private mission — which includes commander Jared Isaacman, pilot Sian Proctor, medical officer Hayley Arceneaux and mission specialist Chris Sembroski — is orbiting the planet at an altitude of 585 kilometers (363.5 miles), which is above the International Space Station and the highest altitude humans have traveled in years.
Inspiration4, which is expected to return to Earth and splash down this weekend, was paid for by Isaacman for an undisclosed amount, with the main goal of the spaceflight to raise $200 million for St. Jude.
Hayley Arceneaux takes in the view of Earth from the Crew Dragon cupola window.
SpaceX modified the top of Crew Dragon capsule Resilience to add a massive window for the astronauts, replacing the docking hatch that is under the spacecraft’s nose cone with the cupola.
Spacecraft commander Jared Isaacman speaks into a microphone as he peers out the cupola window.
The cupola is the largest window by surface area ever put in space.
Mission specialist Chris Sembroski is seen taking a photo through the cupola, from an exterior camera on Crew Dragon.
Isaacman is the third billionaire to fly to space this year, following Sir Richard Branson and Jeff Bezos in July. But the latter two — flying with their respective companies, Virgin Galactic and Blue Origin — spent only a couple of minutes each in space, as those companies’ rockets fly on what are known as suborbital trips. In contrast, Inspiration4 is an orbital mission, with the crew spending multiple days in space and going around the Earth as many as 15 times in day.
Musk, among those who saw them off before launch, tweeted that he spoke to the Inspiration4 crew Thursday and that “all is well.”
“Missions like Inspiration4 help advance spaceflight to enable ultimately anyone to go to orbit & beyond,” Musk wrote in another tweet.
SpaceX CEO Elon Musk poses with the crew before launch on September 15, 2021.
John Kraus / Inspiration4
The Inspiration4 crew is making history in ways beyond becoming the first group of nonprofessional astronauts in orbit: Proctor is the first Black female to pilot a spacecraft, and Arceneaux is the youngest American and first person with a prosthesis to fly in space.
Check out more photos from launch day at NASA’s Kennedy Space Center in Florida:
Medical officer Hayley Arceneaux points to the camera as she and pilot Sian Proctor board the Tesla Model X after suiting up before the launch on September 15, 2021.
John Kraus / Inspiration4
SpaceX’s Falcon 9 rocket lifts off carrying Crew Dragon spacecraft Resilience on September 15, 2021.
John Kraus / Inspiration4
The view inside the Crew Dragon spacecraft about 30 seconds after liftoff as the Falcon 9 rocket accelerated away from Earth on September 15, 2021.
The shimmering exhaust plume of SpaceX’s Falcon 9 rocket launching into the dusk sky above Florida on September 15, 2021.
John Kraus / Inspiration4
Tesla to reverse solar price hike for some customers: legal filing
Smith Collection/Gado | Archive Photos | Getty Images
Tesla is trying to placate some solar customers who say they faced sudden price hikes earlier this year, according to new filings with the U.S. district court in San Jose, California.
In a Thursday filing, customers’ attorneys wrote, “Tesla informed counsel for Plaintiffs that Tesla had recently launched a program for customers who signed Solar Roof contracts before the April 2021 price changes to return those customers to their original pricing (if they were subject to a price increase in April 2021).”
As of Friday afternoon, further details of this program were not apparent on Tesla’s solar websites nor the Engage website for customers and advocates of the company. CNBC reached out to plaintiffs’ attorneys and Tesla to get further details about the program. They did not immediately respond.
This spring, frustrated Tesla solar customers sued the company after experiencing surprise price increases.
Filings in three separate lawsuits alleged that Tesla solar customers had already signed contracts with Elon Musk’s electric vehicle and renewable energy venture, and even prepared to have solar photovoltaics installed at their homes, when they were surprised by sudden price hikes that required additional payments to move ahead with their installations.
The price hikes were not trivial. For example, plaintiff Matthew Amans’ solar roof price shot up from around $72,000 per his original contract to around $146,000, according to lawsuit filings.
Those lawsuits were later consolidated into Amans v Tesla, Inc.
Tesla hiked prices for its solar installations at least twice early this year, and made it a requirement for customers ordering solar panels or roof tiles to order the Powerwall home energy storage system as well. Later, CEO Elon Musk revealed that the company would not be able to make enough Powerwalls to keep up with demand this year because of the ongoing microchip shortage.
Overall, solar remains a fairly small part of Tesla’s business. Tesla reported energy generation and storage revenue of $801 million in the second quarter of 2021, with a cost of revenue of $781 million for that division. The company does not break out revenue from solar on its own — the unit includes revenue from its lithium-ion battery energy storage systems, which range from home backup batteries to giant, utility-scale systems.
By way of comparison, Tesla booked $10.2 billion in automotive sales during the quarter.
Elizabeth Holmes pushed faster Theranos Walgreens rollout: Testimony
Elizabeth Holmes, CEO of Theranos, attends a panel discussion during the Clinton Global Initiative’s annual meeting in New York, September 29, 2015.
Brendan McDermid | Reuters
SAN JOSE, CALIF. – A former Theranos scientist testified Friday that Elizabeth Holmes pressured her to validate blood test results from the company’s Edison machine to speed up a rollout in Walgreens despite problems with the device’s accuracy.
Surekha Gangakhedkar, a senior scientist at Theranos for eight years who reported directly to Holmes, testified that she returned from a vacation in August 2013 and discovered that Theranos was about to launch its Edison blood-testing devices in Walgreens stores.
“I was very stressed and unhappy and concerned with the way the launch was going” Gangakhedkar said. “I was not comfortable with the plans that they had in place so I made a decision to resign and not continue working there.”
Gangakhedkar recalled meeting with Holmes in September 2013 about the issues that prompted her resignation.
“At that time she mentioned that she has promised to deliver to the customers and didn’t have much of a choice then to go ahead with the launch,” Gangakhedkar said becoming emotional on the stand.
“Ms. Holmes said she didn’t have much of a choice?” asked Robert Leach, an assistant U.S. attorney.
“Yes,” she replied.
Despite signing a non-disclosure agreement, Gangakhedkar said she printed some documents and took them home when she quit because she was “worried about the launch, I was actually scared that if things do not go well I would be blamed.”
Gangakhedkar was granted immunity from criminal charges in exchange for her testimony.
She testified that in August 2013 she didn’t think the Edison 3.0 and 3.5 were ready to be used for patient testing, adding “there were problems with getting consistent results.” However, Gangakhedkar recalled that Holmes was pressuring the team to validate the tests even though “in my opinion she was aware,” of the accuracy issues.
Holmes is fighting 12 charges of wire fraud and conspiracy to commit wire fraud, and has pleaded not guilty. In opening statements, her defense attorney told jurors that Holmes was an ambitious young woman who made mistakes but didn’t commit a crime.
Earlier in the day, Erika Cheung, a former lab associated turned whistleblower, concluded her testimony after three days on the stand. Cheung recalled that frequent quality control failures in the lab created substantial delays in test results for patients.
“We had people sleeping in their cars because it was just taking too long,” Cheung testified. “Every few days we were having to run samples over and over again.”
Cheung, who quit Theranos six months after joining as a college graduate, said she “became concerned probably a month in with the Vitamin D samples.”
Gangakhedkar’s testimony continues on Tuesday. Among the insiders the government plans to call to testify next is Daniel Edlin, a project manager who reported directly to Holmes and worked on the Walgreens partnership. Edlin was also friends with Holmes’ brother, Christian.
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