Weekly Macro Data Coverage Jan 27, 2019

Key Highlights:

  • Liquidity in the banking system remains below Rs.2 lakh crore during the third week of January 2020
  • 10-yr sovereign yield has been trading at 6.84 for past two weeks
  • Indian rupee has depreciated by 0.39% to 71.19 against the US dollar over the week
  • Most of the Asian currencies are falling due to economic uncertainty in china over corona virus
  • Major events for the currency market during this week will be BoE’s MPC meeting (due on Thursday) and India’s union budget (due on Saturday).

Liquidity

Liquidity in the banking system remains below Rs.2 lakh crore during the third week of January 2020. This amount was close to 3 lakh crore during the end of December 2019. The call money rate (weighted average) stands at 4.97%, which is 18 bps lower than the repo rate. The over-night lending rate is at the lower bend of the policy corridor. Over the week, forex reserve has also surged by $940 million to $462.15 billion – adding to the existing liquidity in the system.

Capital Market

In the domestic capital market side, the 10-yr sovereign yield has been trading at 6.84 for past two weeks. After the special OMO operations of RBI, the long-term yield had marginally softened to below 6.75% during the early weeks of this month. The yield is steady as government issuances declined amid of higher fiscal deficit. It is known that fiscal deficit for this financial year has reached Rs. 7 lakh crore by November 2019. This week’s major event for the market is union budget FY21, will be presented on this Saturday. Marker will keep a close eye on fiscal deficit target for FY21.

Currency Trend

Talking about currency market, Indian rupee has depreciated by 0.39% to 71.19 against the US dollar over the week. Most of the Asian currencies are falling due to economic uncertainty in china over corona virus. At the same time, market is volatile due to two major events due this week; MPC meeting of Bank of England due on Thursday and India’s union budget for FY21 on Saturday.

 

Interest rates and ratio:

Interest Rate

Jan.,18

Dec.,20

Dec.,27

Jan.,03

Jan.,10

Jan.,17

2019

2019

2019

2020

2020

2020

Policy Repo Rate

6.50

5.15

5.15

5.15

5.15

5.15

Call Money Rate (WA)

6.41

5.06

5.11

5.05

4.92

4.97

364-Day Treasury Bill Yield

6.83

5.27

5.30

5.30

5.29

5.30

2-Yr Indian G-Sec

7.00

5.82

5.76

5.69

5.75

5.70

10-Yr Indian G-Sec

7.32

6.81

6.74

6.73

6.84

6.86

10-Yr US G-Sec

2.76

1.88

1.79

1.82

1.83

1.69

AAA (Indian corporate)

8.57

7.63

7.56

7.60

7.64

7.86

Spread in bps (10Yr Indian- US)

456

493

495

491

502

517

Credit/Deposit Ratio

77.86

76.47

-

76.04

-

-

USD LIBOR (3 month)

2.3846

1.5340

1.5331

1.5405

1.5270

1.5311

Forward Premia of US$ 1-month

4.22

3.88

3.96

3.68

3.71

4.05

US$ 3-month

4.19

3.82

3.90

3.93

4.11

4.16

US$ 6-month

4.13

4.33

4.38

4.27

4.20

4.22

Source: RBI, Investing.com

Deposit (In Rs. Lakh cr)

Bank Credit (In Rs. Lakh cr)

As on Jan 03,2020

132.10

100.45

As on Dec 06,2019

131.06

99.35

As on Dec 21,2018

119.1

92.8

YTD (% change)

0.79%

1.11%

YoY (% change)

9.80%

7.6%

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

 

18-Jan-19

27-Dec-19

03-Jan-20

10-Jan-20

17-Jan-20

NSE Index

10,906.95

12,245.80

12,226.65

12,256.80

12,352.35

NSE Index Return

1.04

-0.21

-0.16

0.25

0.78

BSE Index

36,386.61

41,575.14

41,464.61

41,599.72

41,945.37

BSE Index Return

1.05

-0.26

-0.27

0.33

0.83


Liquidity Operation by RBI:


Source: RBI, Acuité Research;

Note: Net injection (+) and Net absorption (-)

Source: RBI


Policy Corridor and WACR




Corporate debt (in Rs. Lakh Cr)




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

Source: Acuité Research, RBI



Commodity Price Index (3 Month Moving Average)




Commodity Price Movement (3 Month Moving Average)




USD-INR Movement

Source: RBI, Acuité Research

Birabrata Panda
Sr. Statistician/Economist

 

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