India Morning Report: RBI Announcement brings in the relief jump

Markets, finally assured of their assessment of the long road ahead, jumped at the heartening news , though expected, of no change in monetary policy parameters from 4% CRR to 23% SLR and the bank rate temporarily at 10.25%. the Central Bank will “rollback liquidity steps in a calibrated manner” when stability returns and the yields are already south at 8.05% , Rupee climbed south at 59.75 levels but unlikely spoiling for a flight/light immediately as markets parry at yesterday’s levels but back in the green after the jump in selected stocks

The jump has of course died as he policy announcements are over, an unseemly trend, now seen twice in the last 4 years Our detailed RBI policy analysis will be available. Futures and options markets could be demotivated in volumes after the Rupee spike , still not sure of a trade after the loss of growth policy eigenvalues and a lack of a down trade in the Equities or Fixed income markets in this month. Oil payments schedules can probably be aggregated at the end of August

Credit Growth / Deposit growth projections in the quarterly review come in at 15% and 11% respectively. Banks will be unable to raise rates in either direction in a hurry. housing NBFCs seem to have lost the most, lIc housing levels at 180 unheard of and IDFC (Infra, PE, AMC) at 110 levels after a long break of nearly two years. M3 growth will be 13% as forecast today the High CAD for three years has been highlighted by outgoing Governor as a structural risk. The next RBI review will fall immediately after the expected Fed announcements of QE withdrawal in the September policy

RBI did right and is on watch but it seems that money is still pulling at the current Rupee levels as the Oil calculations get ready to upset the new equilibrium and the BoP risk comes fore much before exporters catch the new opportunities

 

 

 

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One thought on “India Morning Report: RBI Announcement brings in the relief jump

  1. Pingback: India Morning Report: There is the Rupee and then the equity markets… | The India Investment Post (earlier india.advantages.us)

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