International Economy - Current Affairs Questions and Answers

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1)   India and which country are set to expedite development of the Rovuma gas discovery?
- Published on 23 Oct 17

a. Mozambique
b. Malawi
c. Madagascar
d. Cote d'Ivoire
Answer  Explanation 

ANSWER: Mozambique

India and Mozambique agreed to expedite development of the giant Rovuma gas discovery, which is planned to be converted into LNG for exports.

ONGC Videsh Ltd, the overseas arm of state-owned Oil and Natural Gas Corp (ONGC), holds 16 per cent stake in Mozambique offshore block Rovuma Area 1.

Oil India Ltd has 4 per cent stake while a unit of Bharat Petroleum Corp Ltd (BPCL) holds 10 per cent stake.

The Area 1 covers roughly 10,000 square kilometre area and is located in northernmost part of offshore Mozambique Rovuma Basin.

According to OVL, second and final exploration phase for Area-1 ended on January 31, 2015 and have resulted in five discoveries, with combined recoverable resource of about 60 trillion cubic feet.

Area-1 represents one of the largest natural gas discoveries in offshore East Africa and has the potential to become one of the world's largest LNG producing hubs.

Area-1 plans to develop initially two LNG trains of capacity 6 million tonnes per annum each.

Area-1 is working towards taking final investment decision (FID) as quickly as possible.

Area-1 has also incorporated Mozambique LNG1 Company Pte Ltd in Singapore to oversee marketing and shipping activities of LNG from first 2 trains of Golfinho-Atum field.

The partners are negotiating with buyers for conversion of existing non-binding Heads of Agreements (HOAs) to Sales Purchase Agreements (SPAs). Area-1 targets to raise up to USD 12-15 billion through project finance.

2)   Which country's Central Bank is set to block access to crypto-currencies websites?
- Published on 11 Oct 17

a. Ukraine
b. Crimea
c. Georgia
d. Russia
Answer  Explanation 

ANSWER: Russia

Russia will block access to websites of exchanges that offer crypto-currencies such as Bitcoin, Russian Central Bank.

Russian financial authorities initially treated any sort of money issued by non-state approved institutions as illegal, saying they could be used to launder money.

Later the authorities accepted the globally booming market of crypto-currencies but want to either control the turnover or to limit access to the market

The central bank sees rising interest in crypto-currencies because of high returns from buying into such instruments.

The crypto-currencies gradually transform into high-yielding assets from being a mean of payment.

Bitcoin, the most well-known virtual currency that emerged in mid-2010, last traded at around USD 4,807, up from its initial price of less than USD 1.

For businesses the usage of such crypto-currencies as an investment object carries unreasonably high risks.

Russian authorities said they would like to regulate the use of crypto-currencies by Russian citizens and companies.

3)   Spain ordered the suspension of which parliament preventing it from declaring unilateral independence?
- Published on 06 Oct 17

a. Catalan
b. Basque
c. Estonian
d. Mexican
Answer  Explanation 

ANSWER: Catalan

Spain’s Constitutional Court on 5th Oct 2017 ordered the suspension of Monday’s session of the regional Catalan parliament, throwing into doubt its plans to declare unilateral independence from Spain.

The speaker of the Catalan parliament, Carme Forcadell, accused the Madrid government of using the courts to deal with political problems and said the regional assembly would not be censored.

But she said parliamentary leaders had not yet decided whether to defy the central court and go ahead with the session.

The suspension order further aggravated one of the biggest crises to hit Spain since the establishment of democracy on the 1975 death of General Francisco Franco.

But Spanish markets rose on perceptions the order might ward off, at least for now, an outright independence declaration.

Spanish Prime Mariano Rajoy called on Catalan leader Carles Puigdemont to drop independence plans or risk “greater evils”.

Secessionist Catalan politicians have pledged to unilaterally declare independence at the Oct 2 session after Oct 1's referendum, banned by Madrid and marked by violent scenes where Spanish police sought to hinder voting.

The constitutional court said it had agreed to consider a legal challenge filed by the anti-secessionist Catalan Socialist Party.

Spanish shares and bonds, hit by the political turmoil in Catalonia, strengthened after the news of the court’s decision.

The main IBEX stock index rose 2.5 percent and the yield on Spain’s 10-year bond fell.

The Spanish government will approve a decree on Friday making it easier for companies to transfer their legal base out of Catalonia.

4)   Which country is set to retain its position as the top nation for receiving remittances, according to World Bank?
- Published on 05 Oct 17

a. Pakistan
b. Nepal
c. Bangladesh
d. None of the above
Answer  Explanation 

ANSWER: None of the above

India is expected to retain its position as the top remittances receiving country, with its diaspora set to pump in a whopping USD 65 billion in the year 2017.

Ahead of the annual meeting of the International Monetary Fund and the World Bank, a report issued by the global lender said that remittances, which include flows to high-income countries, are projected to grow by 3.9 per cent to USD 596 billion.

After India the other top five remittances receiving countries are China (USD 61 billion), the Philippines (USD 33 billion), Mexico (USD 31 billion), and Nigeria (USD 22 billion).

However, as a share of gross domestic product (GDP) for 2017, the top five recipients are smaller countries—the Kyrgyz Republic, Haiti, Tajikistan, Nepal, and Liberia.

Remittances growth to the South Asia region, the bank said will be moderate at 1.1 per cent to USD 112 billion this year, due to continuing impact of lower oil prices and 'nationalisation' polices leading to constrained labor market conditions in the Gulf Cooperation Council (GCC) countries.

Remittances to India, the world’s largest remittance recipient, will grow by 4.2 per cent in 2017 to USD 65 billion, following a decline of nine per cent in 2016.

India, in 2016, received remittances amounting to USD 62.7 billion.

Flows to Pakistan are expected to remain flat this year, while Sri Lanka, Bangladesh and Nepal will see a decline.

Remittances to the region will grow by a weak 2.6 per cent to USD 114 billion in 2018, the bank said. India’s remittances in 2018 is expected to grow at 2.5 per cent.

According to the bank, the economic slowdown in the GCC has adversely impacted migrant worker flows from the South Asia Region.

For Pakistan, registered migrant workers in Saudi Arabia dropped from 522,750 in 2015 to 462,598 in 2016; those in the United Arab Emirates fell from 326,986 in 2015 to 295,647 in 2016.

With only 89,624 registered for Saudi Arabia up to July 2017, a steep fall in Pakistani migration to that country is anticipated.

The number of Indian workers emigrating to Saudi Arabia dropped from 306,000 in 2015 to 162,000 in 2016; those going to the United Arab Emirates decreased from 225,000 in 2015 to 159,000 in 2016.

Total Indian worker outflows fell from 781,000 in 2015 to 506,000 in 2016, the bank said.

Bangladesh, on the other hand, bucked the trend somewhat given earlier Saudi plans for recruitment of 400,000 workers (half of them female) from Bangladesh.

5)   India’s forex reserves rose past which mark for the first time on Sept 8, 2017, according to RBI?
- Published on 18 Sep 17

a. US $300 billion
b. US $380 billion
c. US $400 billion
d. US $410 billion
Answer  Explanation 

ANSWER: US $400 billion

India’s foreign-exchange reserves rose past US$400 billion for the first time ever, strengthening policy makers’ buffers ahead of an expected reduction in US stimulus.

The stockpile stood at US$400.7 billion Sept 8 the Reserve Bank of India indicated.

With the Federal Reserve set to shrink its balance sheet—details of which could be announced next week—the holdings may help the rupee withstand any volatility even if global funds turn away from India’s slowing economy.

It is predicted by experts that India’s current account deficit will double to 1.4 percent of gross domestic product in the year through March 2018.

That’s still far lower than the unprecedented 4.8 per cent of GDP touched in 2013, when the Fed had first signalled intent to curb its massive bond-buying program.

Those “taper tantrums” triggered a sharp slide in the rupee and reserves depleted to around US$275 billion as the central bank struggled to buoy the currency.

India’s holdings are about US$376 billion now if stripped of gold, enough to pay for about a year of imports.

The pace of reserve accretion has been one of the strongest within Asia in the past 12 months, according to analysts at Morgan Stanley.

The RBI last month cut interest rates to the lowest in seven years to boost flagging growth.

At the same time, it has been absorbing surplus funds in the banking system to keep price pressures under control. Inflation has been rising sharply from record lows, and the central bank wants it to stay near the 4 per cent mid-point of its target range.

The rise in foreign exchange reserves comes as yield-hungry global investors take advantage of high real rates of interest and a rupee that has gained more than 6 per cent this year against the dollar.

Foreign holdings of rupee debt have risen by just US$326 million so far in September and August’s 126-billion rupee inflow was the smallest in six months, as investors have used up almost all of their eligible quotas to buy Indian bonds.

6)   Which country's socialist leader and president declared total independence from IMF and World Bank?
- Published on 27 Jul 17

a. Bolivia
b. Venezuela
c. Mexico
d. Spain
Answer  Explanation  Related Ques

ANSWER: Bolivia

Bolivia’s President Eva Morales declared on twitter that his nation has achieved “total independence” from the IMF and the World Bank

The socialist leader published his comments after meeting with his peers Friday at a gathering in Argentina of the Mercosur, a sub-regional economic bloc.

Bolivia begins its process of becoming a full member of the Mercosur, also called the Southern Common Market, which includes Argentina, Brazil, Paraguay, Uruguay, and Venezuela.

Until now Bolivia has served as an associate member along with Chile, Columbia, Ecuador, Guyana, Peru, Suriname.

Also on Friday, President Morales accused world powers of intervening in oil rich nations such as Libya, Iraq, and Venezuela to “appropriate resources”.

Historically, Bolivia has relied heavily on the IMF for loans to fund their socialist government expenditures.

President Morales has even previously quipped that his nations past dependence on the agencies was so great that the IMF had an office in government headquarters and even participated in their meetings.

President Morales become Bolivia’s first indigenous leader in 2006, and gained popularity after the nations popular uprising known as “The Cochabamba Water War”, which occurred in 2000, and was waged against the U.S.-based Bechtel Corporation over water privatization.

The World Bank at the time, which was closely associated with the Bechtel Corporation, shed light on the growing debt issues facing the country through policy publications.

According to a report from teleSUR, some of Bolivia’s largest resistance struggles in the last 60 years have targeted the economic policies carried out by the IMF and the World Bank.

7)   China's economy has expanded at a faster rate, reaching what GDP value in Q2 2017?
- Published on 18 Jul 17

a. 6.6 percent
b. 6.7 percent
c. 6.8 percent
d. 6.9 percent
Answer  Explanation 

ANSWER: 6.9 percent

China's economy expanded faster-than-expected in the second quarter, setting the country on course to comfortably meet its 2017 growth target.

This is also giving policymakers room to tackle big economic challenges ahead of key leadership changes later this year.

The boost to growth was in part driven by firmer exports and production, in particular steel, which could heighten trade tensions as the United States and China begin economic talks this week.

US President Donald Trump has made the US trade deficit with China a top agenda item in bilateral talks and has also flagged the steel trade as a point of contention.

China's gross domestic product rose 6.9 per cent in the second quarter from a year earlier, the same rate as the first quarter, the National Bureau of Statistics said on 17th July 2017.

That was higher than analysts' expectations of a 6.8 per cent expansion.

Economic data from the second quarter has prompted a number of analysts to upgrade their GDP forecasts for China for 2017.

Some moderation in growth is expected later this year as policymakers' efforts to rein in property and debt risks weigh on activity.

GDP growth will remain robust in the second half but slower than the first half, due to the high base.

The robust numbers kept world shares near a record high and briefly helped China's major stock indexes recoup earlier losses.

The second quarter numbers put the economy on a strong footing to meet China's growth target of around 6.5 per cent in 2017, which would give policymakers room to defuse financial risks.

While growth in the high-flying property sector has cooled this year, a rebound in exports after several years of decline has helped prevent any broader slowdown in China's economy.

Retail spending and factory output were also bright spots in the first half. Retail sales growth picked up to 10.8 per cent in the second quarter from 10.0 per cent in the first quarter, a Reuters calculation based on official data showed.

Factory output also picked up in the second quarter, though the 6.9 per cent growth for the first half was only a slight pickup from recent quarters.

8)   India has emerged as the ___ largest exporter of agri products internationally according to Commerce Ministry.
- Published on 14 Jun 17

a. 5th
b. 6th
c. 7th
d. 8th
Answer  Explanation 


Commerce Secretary Rita Teaotia, while addressing the 22nd APEDA Export award function in New Delhi on 12 June 2017, announced that India has emerged as the 7th largest exporter of agri-products globally.

There is a significant increase in the exports of food products from the country and it represents more than 12 percent of total exports.

Total merchandise exports during 2016-2017 are more than 276 billion dollars out of which agricultural exports comprised nearly 33 billion dollars.

Indian food products are majorly exported to countries such as Vietnam, UAE, Saudi Arabia, USA, Iran, Iraq and Nepal.

Further, the exporters even in times of economic slowdown have continued to grow and added that opportunities in newer markets have to be searched for further growth.

The awards function witnessed the presentation of 82 APEDA awards for the year 2014-2015 and 2015-2016. It included 2 Diamond Trophies, 33 Gold, 29 Silver and 18 Bronze awards.

APEDA: Know More

  • It is an apex body of the Ministry of Commerce, Government of India, to promote the export of agricultural commodities and processed food products.
  • APEDA links Indian exporters to global markets besides providing comprehensive export-oriented services.
  • It provides referral services and suggests suitable partners for joint ventures.
  • Its export basket ranges from typically Indian ethnic products like pickles, chutneys, sauces to rice, honey, fresh and processed fruits and vegetables, beverages, poultry, agri-products, food grains and other Indian delicacies.

9)   What does UNOSSC stand for, in the context of the UN?
- Published on 12 Jun 17

a. United Nation’s Office for Southern-South Cooperation
b. United Nation’s Office for South-Southern Cooperation
c. United Nation’s Office for South-South Cooperation
d. United Nation’s Office for Southern-Southern Cooperation
Answer  Explanation 

ANSWER: United Nation’s Office for South-South Cooperation

India and the United Nations Office for South-South Cooperation (UNOSSC) on 8 June 2017 launched a partnership fund to support the Sustainable Development Goals (SDGs) across the developing world.

The fund was launched on the occasion of the World Oceans Day at a special ceremony held at the Permanent Mission of India to the UN.

The India-UN Development Partnership Fund will implement country-level projects that are catalytic towards achieving the 17 Sustainable Development Goals of the 2030 Agenda.

The initiative is aimed at reducing poverty and hunger, improving health, education and equality, and expanding access to clean water, energy and livelihoods.

The fund will focus on Least Developed Countries (LDCs) and Small Island Developing States (SIDS).

CEWSPIC: Know More

  • Initially, the fund will start with an initial contribution of USD 1 million for its first project Climate Early Warning System in Pacific Island Countries (CEWSPIC).
  • CEWSPIC Project was formulated by India and the UN Development Programme in consultation with the governments of Cook Islands, Kiribati, Marshall Islands, Micronesia, Nauru, Solomon Islands and Tonga.
  • The project will increase resilience to natural disasters in these seven Pacific island countries.

10)   India moved the WTO against US on what matter?
- Published on 12 Jun 17

a. Imposition of high import duty on certain Indian iron and steel products
b. Imposition of high import duty on certain Indian steel products
c. Imposition of high import duty on certain Indian iron products
d. Imposition of high import duty on certain Indian zinc products
Answer  Explanation 

ANSWER: Imposition of high import duty on certain Indian steel products

India has moved the World Trade Organisation (WTO) against the US as it has not yet complied with the rulings of the WTO pertaining to imposition of high import duty on certain Indian steel products.

In December 2014, the WTO’s appellate body pronounced a ruling against the act of US which is imposing high import duty on certain Indian steel products.

It had ruled that the imposition of import duty on steel products was inconsistent with various provisions of the Agreement on Subsidies and Countervailing Measures.

The Agreement on Subsidies and Countervailing Measures (the SCM Agreement) - addresses two separate but closely related matters

1. The multilateral disciplines on the use of subsidies and the
2. Conditions under which Members may apply countervailing measures.

India has sought consultation with the US for compliance of the WTO’s rulings.

If the US refuses to comply then India has planned to approach the WTO’s compliance panel.

In order to comply with the WTO rulings on countervailing duties on imports of hot-rolled carbon steel products from India, the US needs to amend its domestic norms.

Earlier, the US had moved the arbitration panel of the World Trade Organisation against India as it complained that India had failed to remove trade restrictions on American poultry.

WTO: Know More

  • The WTO is an inter-governmental organization for governments to negotiate global trade agreements and progressively liberalizing trade.
  • The WTO operates a system of trade rules that apply to all its members. The World Trade Organisation is also a place for Member governments to settle their trade disputes.
  • It’s located in Geneva, Switzerland.
  • It was established on 1 January 1995 and its official languages are English, French and Spanish. Countervailing duties are those duties that are imposed by a country to counter the negative impact of import subsidies to protect domestic producers.

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