25th November Current Affairs

1.China’s Moon Mission

News: China is preparing to launch an unmanned spacecraft to bring back lunar rocks, the first attempt by any nation to retrieve samples from the moon in four decades.

About the Chang’e-5 probe:

  • The probe is named after the mythical Chinese moon goddess.
  • The rocket is comprised of four parts:an orbiter, a returner, an ascender and a lander.
  • The objective of the mission is to bring back lunar rocks,the first attempt by any nation to retrieve samples from the moon in four decades.
  • If successful, China will be only the third country to have retrieved samples from the moon, following the U.S. and the Soviet Union in the 1960s and 1970s.
  • This will help scientists learn about the moon’s origins, formation and volcanic activity on its surface.
  • The Chinese probe will collect 2 kg of surface material from a previously unexplored area known as Oceanus Procellarum — or “Ocean of Storms”— which consist of a vast lava plain.

Four “firsts” in China’s space history:

  • The first time for a probe to take off from the surface of the Moon.
  • The first time to automatically sample the lunar surface.
  • The first time to conduct unmanned rendezvous and docking in lunar orbit.
  • The first time to return to Earth with lunar soil samples in escape velocity.

Significance of the mission

  • As per the Lunar and Planetary Institute, rocks found on the Moon are older than any that have been found on Earth and therefore they are valuable in providing information about the Earth and the Moon’s shared history.
  • Lunar samples can help to unravel some important questions in lunar science and astronomy, including the Moon’s age, its formation, the similarities and differences between the Earth and the Moon’s geologic features. For instance, the shape, size, arrangement and composition of individual grains and crystals in a rock can tell scientists about its history, while the radioactive clock can tell them the rock’s age.
  • Further, tiny cracks in rocks can tell them about the radiation history of the Sun in the last 100,000 years.


2.Cyclone Nivar

News: A developing cyclonic disturbance in the Bay of Bengal is expected to become a ‘severe cyclonic storm’ and make landfall in Tamil Nadu.

Cyclone Nivar

  • The IMD has forecasted the development of a cyclone in the Southwest region of the Bay of Bengal, off Tamil Nadu coast.
  • It has said that it will strengthen into a cyclone. Once intensified, it would acquire its name ‘Nivar’, proposed by Iran. After cyclone Gaja in 2018, this will be the second cyclone to cross Tamil Nadu in the last two years.

Naming of cyclones:

  • The names for tropical cyclones in the Bay of Bengal and the Arabian Sea are suggested by Bangladesh, India, Maldives, Myanmar, Oman, Pakistan, Sri Lanka, Thailand, Iran, Qatar, Saudi Arabia, the UAE and Yemen as per the formula agreed by World Meteorological Organisation and the United Nations Economic and Social Commission for Asia and the Pacific in its 27th session in 2000.
  • Each country provides 13 names.

In the latest list, India had proposed:

  • Gati (speed), Tej (speed), Marasu (musical instrument in Tamil), Aag (fire) and Neer (water), among others, for the new list.

The names of the next few cyclones adopted by member countries in April 2020 are as follows:

  • Burevi (Maldives), Tauktae (Myanmar), Yaas (Oman), and Gulab (Pakistan).
  • These are among the 169 names suggested by the 13 countries.

Tropical Cyclone

  • A Tropical cyclone is an intense circular storm that originates over warm tropical oceans and is characterized by low atmospheric pressure, high winds, and heavy rain.
  • Cyclones are formed over slightly warm ocean waters. The temperature of the top layer of the sea, up to a depth of about 60 meters, need to be at least 28°C to support the formation of a cyclone.
  • This explains why the April-May and October-December periods are conducive for cyclones.
  • Then, the low level of air above the waters needs to have an ‘anticlockwise’ rotation (in the northern hemisphere; clockwise in the southern hemisphere).
  • During these periods, there is an ITCZ in the Bay of Bengal whose southern boundary experiences winds from west to east, while the northern boundary has winds flowing east to west.
  • Once formed, cyclones in this area usually move northwest. As it travels over the sea, the cyclone gathers more moist air from the warm sea which adds to its heft.


3.Negative Yield Bonds

News: Recently, demand for negative yield bonds is on rise in the global market.


  • Negative Yield Bonds: Are debt instruments that offer to pay the investor a maturity amount lower than the purchase price of the bond. These are generally issued by central banks or governments, and investors pay interest to the borrower to keep their money with them.
  • Generally, investors purchase the bonds at their face value, which is the principal amount invested. In return, investors typically earn a yield of a bond.
  • Each bond has amaturity date, which is when the investor gets paid back the principal amount.

Reasons behind buying Negative Yield Bonds:

  • Many hedge funds and investment firms that manage mutual funds invest in negative bonds in order to diversify their investment. Bonds are often used to pledge as collateral for financing and as a result, need to be held regardless of their price or yield. Foreign investors might believe the currency’s exchange rate will rise, which would offset the negative bond yield.
  • Domestically, investors might expect a period of deflation, or lower prices in the economy. For Example:Consider a one-year bond that yields minus 5% but at the same time inflation is expected to be minus 10% over the same period.
  • That means the investor in the bond would have more purchasing power at the end of the year because prices for goods and services would have declined far more than would the value of the investment in the fixed-income security.
  • To Create Safe Haven Assets: Investors might also be interested in negative bond yields if the loss is less than it would be with another investment. In times of economic uncertainty, many investors rush to buy bonds because they’re considered safe-haven investments.
  • These purchases are called the flight-to-safety-trade in the bond market. During such a time, investors might accept a negative-yielding bond because the negative yield might be far less of a loss than a potential double-digit percentage loss in the equity markets.

Current Scenario:

  • Today when the world is fighting the Covid-19 pandemic and interest rates related to bonds and other financial instruments in developed markets across Europe are much lower, investors are looking for relatively better-yielding debt instruments to safeguard their interests. China sold its negative-yield bonds for the first time, and this saw a high demand from investors across

Reason for High Demand:

  • Yields offered in safe European bonds are much lower than ones offered by China. As against minus —0.15% yield on the 5-year bond issued by China, the yields offered in safe European bonds are much lower, between –0.5% and —0.75%.
  • Majority of the large economies are facing a contraction in their GDP for 2020-21 while China is one country that is set to witness positive growth as its GDP expanded by 4.9% in the third quarter of 2020.
  • While Europe, the United States and other parts of the world are facing a second wave of Covid-19 cases, China has demonstrated that it has controlled the spread of the pandemic and is therefore seen as a more stable region.

Factor Driving the High Demand:

  • Huge amount of liquidity injected by the global central banks after the pandemic. They have injected an estimated more than 10 trillion dollars of liquidity through various instruments in the financial system.
  • Investors might also be temporarily parking money in negative yield bonds for the purpose of hedging their risk portfolio in equities. To gain profit and avoid losses in case the fresh wave of the Covid-19 pandemic leads to further lockdowns of economies.

Bond: Is an instrument to borrow money. A bond could be floated/issued by a country’s government or by a company to raise funds.

Yield: The yield of a bond is the effective rate of return that it earns. But the rate of return is not fixed; it changes with the price of the bond.


4.FEMA Violations

News: Recently, the Enforcement Directorate (ED) has opened a preliminary inquiry to examine if borrowings by the Kerala Infrastructure Investment Fund Board (KIIFB) from overseas markets violated the provisions of the Foreign Exchange Management Act (FEMA) 1999. KIIFB was established to manage the Kerala Infrastructure Investment Fund (KIIF), as per the KIIF Act 1999. In 2016, the government changed the role of KIIFB from handler of investment bonds to an entity to mobilise the resources for developmental projectsover and beyond the budget.


  • The Comptroller and Auditor ­General(CAG) highlighted that the KIIFB had raised Rs. 2,150 crore from the international market without the consent of the Central government in 2019.
  • A prior consent of the Government of India is necessary before a State Government raises a loan.
  • KIIFB had also overstepped its legal bounds by issuing masala bonds to raise money from foreign markets in violation of Article 293 (1) of the Constitution.
  • Article 293 (1):The executive power of a State extends to borrowing within the territory of India upon the security of the Consolidated Fund of the State within such limits. State governments can give guarantees within such limits as fixed by the legislature of the concerned State.
  • The ED has also asked the Reserve Bank of India(RBI) about the details of ‘no objection certificate’ it had supposedly extended to the KIIFB, enabling the agency to take sizable loans from the foreign financial market.


  • The investigation could potentially cause a fall in the revenues of the  It might affect the extended loans being offered to KIIFB by the International Finance Corporation (IFC) – a part of the World Bank group.
  • With an ongoing investigation, investors would not be willing to buy its masala bonds, which will further lead to loss of revenues. The investigation can also result in an administrative paralysis, halting all the infrastructure development projects for which the KIIFB had collected the funds.

Kerala Government’s Stand:

  • It disagrees with the CAG’s finding on the basis thatKIIFB is a corporate entity and not the State government. As per FEMA provisions, corporate entities can issue masala bonds to raise funds from foreign markets. Kerala also criticises the move because CAG has unilaterally submitted its audit observations without giving the State its right of reply.

Masala Bonds

  • They are rupee-denominated bonds used by Indian companies to raise funds from the overseas market in Indian rupees.
  • According to RBI, any corporate, body corporate and Indian bank is eligible to issue these bonds overseas.
  • These can be issued and subscribed by a resident of such country that is a member of the financial action task force (FATF) and whose securities market regulator is a member of the International Organisation of Securities Commission (IOSCO). It can also be subscribed by multilateral and regional financial institutions where India is a member country. IOSCO is the international body that brings together the world’s securities regulators and is recognised as the global standard setter for the securities sector.
  • As per the RBI guidelines, the money raised through such bonds cannot be used for real estate activities other than for development of integrated township or affordable housing projects.
  • Also, it cannot be used for investing in capital markets, purchase of land and on-lending to other entities for such activities as stated above.