Weekly Macro Data Coverage July 29, 2019

Key Highlights:

  • Weighted average call money rate (WACR) has been declining for past four weeks and reached 5.61% during 3 rd week of July 2019
  • Daily average liquidity in the system is at Rs. 1.04 lakh crores during the week
  • The overnight interbank lending rate stands at 14 bps lower than the repo rate
  • SBI has announced lowering rate of interest on retail deposits by 5-75 bps across all maturities, August 2019 onwards
  • 10-year US sovereign yield remains stable at 2.07% during the third week of July, 2019
  • Indian 10-year G-sec has reduced by 11 bps to 6.45% during the same period

Liquidity:

The weighted average call money rate (WACR) has been declining for the past four weeks and reached 5.61% during 3 rd week of July 2019. The daily average liquidity in the system is at Rs. 1.04 lakh crores during the week. Therefore, the overnight interbank lending rate stands at 14 bps lower than the repo rate. The credit-deposit ratio reduced to a 10-month low of 76.5 with a substantial improvement in deposits. Initiating the monetary transmission of RBI’s 75 bps rate cut (last 3 consecutive rate cuts), SBI has announced lowering rate of interest on retail deposits by 5-75 bps across all maturities from August 2019 onwards. This is expected to be followed by other commercial banks as well. Going ahead, this will lead to MCLR trimming on fresh loans.

Capital Market

On the global capital market front, the 10-year US sovereign yield remains stable at 2.07% during the third week of July 2019. The investors are sceptical about the economic outlook and fed’s monetary policy. Indian 10-year G-sec, in contrast, has reduced by 11 bps to 6.45% during the same period. The Indian sovereign yield is falling over the central government’s proposal for funding fiscal deficit though external borrowings.

Currency Trend

The Indian rupee has depreciated against the US dollar by 0.22% over a week during the 3 rd week of July 2019. The fall in Indian rupee is on account of higher volume of import over export and the availability of better yields in other emerging market pees such as Indonesia, Vietnam and Malaysia. With the increase in holding of India’s foreign currency assets, the forex reserve has reached $430.37 billion.

 


Interest rates and ratio:

Interest Rate

July.,27

June.,21

June.,28

July.,5

July.,12

July.,19

2018

2019

2019

2019

2019

2019

  Policy Repo Rate

6.25

5.75

5.75

5.75

5.75

5.75

  Call Money Rate (WA)

6.16

5.78

5.78

5.67

5.62

5.61

  364-Day Treasury Bill Yield

7.21

6.13

6.16

6.13

6.06

5.98

  2-Yr Indian G-Sec

7.60

6.29

6.17

6.18

6.06

6.10

  10-Yr Indian G-Sec

7.78

6.91

6.93

6.76

6.56

6.45

  10-Yr US G-Sec

2.96

2.01

2.04

2.12

2.06

2.07

  AAA (Indian corporate)

8.54

8.09

7.95

8.04

8.30

7.42

  Spread in bps (10Yr Indian-10Yr US)

482

490

489

464

450

438

  Credit/Deposit Ratio

75.28

77.25

 

76.51

 

 

  USD LIBOR (3 month)

1.9123

2.3415

2.3549

2.3564

2.3590

2.3606

Source: RBI, Investing.com


Acuité Portfolio Debt Instrument Benchmark Estimates (as on 29 July 2019):

Category

10-Yr Corporate Yield to Maturity

    AAA*

NA    

    AA+

7.66%    

    AA

8.63%    

Source: Acuité Research; # Discount Factor: 0.059; *Outside Benchmark

 


Deposit (In Rs. Lakh cr)

Bank Credit (In Rs. Lakh cr)

  As on July 05, 2019

126.75  

96.98  

  As on June 07,2019

125.4  

96.52  

  As on July 06,2018

114.88  

86.57  

  YTD (% change)

1.08%  

0.48%  

  YoY (% change)

10.33%  

12.02%  

Source: RBI


Money Market Performance

Commercial Paper (Fortnight):

Outstanding (In Rs. Billion)

Amount issued (In Rs. Billion)

  30-Jun-19

5,039.40  

1076.9  

  15-Jun-19

5,561.80  

1078.7  

  30-Jun-18

4,918.30  

1267.3  

  % Change (MoM)

-9.39%  

-0.17%  

  % Change (YoY)

2.46%  

-15.02%  

Source: RBI


Indices

 

27-Jul-18

05-Jul-19

12-Jul-19

19-Jul-19

26-Jul-19

  NSE Index

11,278.35 

11,811.15 

11,552.50 

11,419.25 

11,284.30 

  NSE Index Return

2.44 

0.19 

-2.19 

-1.15 

-1.18 

  BSE Index

37,336.85 

39,513.39 

38,736.23 

38,337.01 

37,882.79 

  BSE Index Return

2.30 

0.30 

-1.97 

-1.03 

-1.18 


Liquidity Operation by RBI

Source: RBI, Acuité Research; Note: Net injection (+) and Net absorption (-)


Corporate debt (in Rs. Lakh Cr)


Net Debt Issuance by Centre and State Government (Rs. Billion)


Commodity Price Index (3 Month Moving Average)


Commodity Price Movement (3 Month Moving Average)


USD-INR Movement

Source: RBI, Acuité Research

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