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The Hindu Editorial Analysis
We understand the significance of reading The Hindu newspaper for enhancing reading skills, improving comprehension of passages, staying informed about current events, enhancing essay writing, and more, especially for banking aspirants who need to focus on editorials for vocabulary building. This article will explore today’s editorial points, along with practice questions and key vocabulary.
RBI Calls for Inclusion of Digital Currency Linkages on the BRICS Agenda
- The Reserve Bank of India (RBI) has suggested to the central government that a proposal should be included in the agenda of the 2026 BRICS summit to link the digital currencies of BRICS countries.
- This information was shared by two sources who asked not to be named because they are not allowed to speak publicly on the issue.
- The main aim of this proposal is to make cross-border payments easier and faster between BRICS nations.
- It could also help reduce dependence on the U.S. dollar, especially at a time when global political tensions are increasing.
- This idea follows a statement made at the 2025 BRICS summit in Brazil, where member countries agreed on the need to connect their payment systems to make international transactions smoother.
- Earlier, the RBI has publicly shown interest in linking India’s digital rupee with digital currencies of other countries to make international payments quicker and to increase the use of the rupee globally.
- However, the RBI has also clearly said that its efforts to promote the rupee internationally are not meant to replace or challenge the U.S. dollar.
- India is set to host the next BRICS summit later this year.
- If the RBI’s proposal is accepted, it will be the first time that a formal plan to connect the digital currencies of BRICS nations is officially discussed at the group level.
- Such a move could upset the United States, which has earlier warned countries against trying to reduce the role of the dollar in global trade.
- S. President Donald Trump has earlier called the BRICS group “anti-American” and has threatened to impose tariffs on BRICS countries.
- So far, none of the BRICS countries have fully launched their digital currencies, but all five main members are currently running pilot projects.
- India launched its digital currency in December 2022, and it has gained around 7 million retail users so far.
- China has said that it plans to increase the global use of its digital yuan.
- The RBI has taken several steps to increase the use of the e-rupee, including allowing payments even without internet connectivity.
- It has also added features that allow the digital currency to be used for specific purposes, such as government subsidy payments.
- Fintech companies have also been allowed to provide digital currency wallets to users.
- The RBI and Brazil’s central bank did not reply to emails asking for their comments on this matter.
- The People’s Bank of China said it had no information about such a proposal.
- The central banks of South Africa and Russia also chose not to comment.
- According to one source, for digital currency links among BRICS countries to work, there must be discussions on shared technology standards, clear rules, and ways to manage differences in trade volumes between countries.
- The source also warned that some countries may be hesitant to use technology developed by other nations, which could slow down progress.
- The source said that real progress will only happen if countries agree on both technical standards and regulatory rules.
- One possible solution being discussed to deal with trade imbalances is the use of foreign exchange swap agreements between central banks.
- In the past, Russia and India tried to increase trade using their own currencies, but they faced serious problems.
- Russia ended up holding a large amount of Indian rupees, which it could not easily spend.
- To deal with this, India’s central bank allowed these extra rupee holdings to be invested in Indian bonds.
- Under the current discussions, it is being suggested that transactions could be settled weekly or monthly using swap arrangements, according to the second source.
IMF Raises India’s Growth Forecast to 7.3%
- The International Monetary Fund (IMF) has increased its estimate for India’s economic growth for the financial year 2025–26 to 7.3%.
- Earlier, the IMF had projected India’s growth at 6.6%.
- This change was announced in the January 2026 update of the World Economic Outlook report, released on Monday.
- The IMF said the increase is mainly because India’s economy performed better than expected in the third quarter and showed strong growth momentum in the fourth quarter.
- The report stated that India’s growth was raised by 0.7 percentage points to 7.3% for FY 2025–26 due to strong recent performance.
- The IMF also said that India’s growth is expected to slow down to 6.4% in 2026 and 2027 as temporary factors supporting growth fade away.
- The IMF’s estimate of 7.3% is slightly lower than the Indian government’s growth projection of 7.4% for the same year.
- For the global economy, the IMF expects growth to stay steady at 3.3% in 2026 and 3.2% in 2027.
- This is broadly similar to the estimated global growth of 3.3% in 2025.
- Compared to the October 2025 forecast, the IMF has slightly raised its 2026 growth outlook and kept the 2027 estimate unchanged.
- The IMF said global growth is being supported by a balance of positive and negative factors.
- While changes in trade policies are creating challenges, strong investments in technology, especially artificial intelligence, are helping growth.
- These technology-related investments are particularly strong in North America and Asia.
- Global growth is also being supported by government spending, supportive monetary policies, easy financial conditions, and the ability of businesses to adapt.
- On inflation, the IMF said that India’s inflation is expected to come close to the target level after falling in 2025 due to lower food prices.
- The Reserve Bank of India aims to keep inflation at around 4%.
Silver reaches a record high of $94 per ounce amid geopolitical unrest
- Silver reached its highest-ever price of $94 per ounce in the international market due to rising global political tensions.
- This happened amid news about a possible U.S. move to acquire Greenland and the European Union’s threat to suspend a trade agreement.
- Silver opened at $93.3 per ounce, rose to a high of $94.09, and later closed at $93.5 per ounce on Monday.
- Prices of silver have doubled since April 2025.
- This sharp rise is mainly due to strong global demand from important industries like semiconductor manufacturing.
- Gold prices also rose sharply, touching an all-time high of ₹4,690 per ounce.
- According to a report by Tata Asset Management Company, gold has reached record highs nearly 50 times in the past year.
- On the Multi Commodity Exchange (MCX), gold prices crossed ₹1,45,000 per 10 grams.
- Silver prices on the MCX also jumped sharply to ₹3,04,000 per kilogram.
- Explaining the rise, Kaynat Chainwala, AVP – Commodity Research at Kotak Securities, said the rally was driven by President Trump’s renewed push for the U.S. to acquire Greenland.
- She added that the S. has also threatened to impose higher tariffs on European countries if the deal does not go through.
- In response, European leaders are considering countermeasures such as tariffs on U.S. goods.
- They are also discussing the possible use of the EU’s anti-coercion tool.
- These issues are expected to be discussed at an emergency EU summit in Brussels on Thursday.
Important Questions
- Why has the RBI advised the central government to place a proposal to connect central bank digital currencies on the 2026 BRICS summit agenda?
- How could linking the digital currencies of BRICS nations simplify cross-border payments and reduce dependence on the U.S. dollar?
- Why did the International Monetary Fund (IMF) revise India’s GDP growth estimate for FY 2025–26 upward to 7.3% in the January 2026 World Economic Outlook update?
- According to the IMF, how are technology-related investments, including artificial intelligence (AI), and accommodative financial conditions supporting global growth in 2026 and 2027?
- What role did geopolitical unrest, including the U.S. proposal to acquire Greenland and the EU’s threat to suspend the trade deal, play in pushing silver prices to $94 per ounce?
- How did President Donald Trump’s tariff threats and Europe’s consideration of retaliatory measures, including the EU’s anti-coercion instrument, affect gold and silver prices in the international and MCX markets?
Important Vocabulary
- Interoperability – ability of systems to work together
- Geopolitical – related to global political relations
- De-dollarisation – reducing use of the U.S. dollar
- Imbalances – unequal trade or financial positions
- Resilient – able to remain strong
- Momentum – continuing economic strength
- Cyclical – related to economic cycles
- Accommodative – supportive economic policies
- Geopolitical – linked to international politics
- Retaliatory – taken in response to another action
- Acquisition – act of buying or taking control
- Anti-coercion – measures against forced pressure
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