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Former Bangladeshi prime minister Khaleda Zia has gone to London for medical treatment. She traveled on an air ambulance provided by Qatar's emir. This comes after significant political changes in Bangladesh with former prime minister Sheikh Hasina being ousted. Zia's son, Tarique Rahman, is set to lead their party in upcoming elections.
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When there are outflows, the rupee tends to weaken. Additionally, most Asian currencies are depreciating against the dollar. When comparing the Indian rupee to the top 10 or 15 currencies globally, it is performing better than average, though it has still depreciated. These global factors and FPI outflows are contributing to the rupee's weakness.
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Currently, the government spending cycle, notwithstanding this years blip (which we think is a blip, and we will discuss the reasons later), looks to be on the path of continued increase. Secondly, PSUs today are more operationally efficient than they have ever been in the last 25 years of Indias history. Both of these factors give me conviction about PSU earnings and asset growth.
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