Weekly Macro Data Coverage May 13, 2019
Key Highlights:

•  The repo WACR differential stands at 8 bps during first week of May, 2019
•  RBI had infused Rs.125 billion on May 3, 2019 through OMO to improve liquidity in the system 
•  RBI has already infused Rs. 850 billion through OMO operation over past four months
•  Indian 10-year sovereign yield has been hovering at 7.4%
•  Indian rupee has depreciated to 69.6 during second week of May, 2019
•  The volatility in financial market on account of US-China trade war has been undermining the value of Indian rupee


Liquidity

Indian banking sector continues to face liquidity deficit over past four months. Since February, 2019, RBI has already infused around Rs. 850 billion in the system through OMO operation. In addition, the central bank has infused Rs.10 billion through currency swap agreement. Despite an infusion of Rs. 125 billion through OMO on May 3, 2019, the weighted average call money rate stands 8 bps higher that the repo rate during the first week of this month. The liquidity condition that intensified due to election related expenditure is expected to improve next month onwards.

Capital Market

From the global market perspective, the 10 year US sovereign yield has been hovering at 2.53%. However, as the US-China trade war has escalated again, the demand for US bond (safe heaven) is expected to increase. This will lower US sovereign bond yield in coming weeks. On a domestic market perspective, the Indian 10 year sovereign yield has been hovering at 7.4% for past four weeks. Higher debt issuances by the central government hints the bond yield is expected to go up. However, RBI’s OMO operation has been supressing the bond yield.  

Currency Trend

The Indian rupee along with currency of other emerging economies has been depreciating against the US Dollar. The Indian rupee has depreciated to 69.6 during second week of May, 2019. The volatility in financial market on account of US-China trade war has been undermining the value of Indian rupee. 


Interest rates and ratio:

Interest Rate

May 04 2018

Apr 05 2019

Apr 12 2019

Apr 19 2019

Apr 26 2019

May 3 2019

 


 

 

 


Policy Repo Rate

6.00

6.00

6.00

6.00

6.00

6.00

Call Money Rate (WA)

5.90

6.18

6.00

6.05

6.16

6.08

364-Day Treasury Bill Yield

6.62

6.31

6.39

6.45

6.50

6.51

2-Yr Indian G-Sec

7.31

6.69

6.73

6.72

6.77

6.76

10-Yr Indian G-Sec

7.73

7.40

7.40

7.42

7.41

7.40

10-Yr US G-Sec

2.95

2.50

2.56

2.56

2.50

2.53

AAA (Indian corporate)

8.28

8.44

8.49

8.81

8.69

8.65

Spread in bps (10Yr Indian-US)

478

490

484

486

491

487

Credit/Deposit Ratio

71.69

 

76.97

 

77.05

 

USD LIBOR (overnight)

1.7044

2.3941

2.3885

2.3856

2.4000

2.3731

Source: RBI, Investing.com



Acuité Portfolio Debt Instrument Benchmark Estimates (as on 10 May 2019):

Category

10-Yr Corporate Yield to Maturity

AAA*

NA

AA+

8.36%

AA

8.87%

Source: Acuité Research; # Discount Factor: 0.063; *Outside Benchmark


 

Deposit (In Rs. Lakh cr)

Bank Credit (In Rs. Lakh cr)

As on Apr 26, 2019

124.86

96.21

As on Mar 29,2019

125.73

97.69

As on Apr 27,2018

113.81

85.17

YTD (% change)

-0.69%

-1.51%

YoY (% change)

9.71%

12.96%

Source: RBI


Money Market Performance

Commercial Paper (Fortnight):

Outstanding (In Rs. Lakh cr)

Amount issued (In Rs. Lakh cr)

31-Mar-2019

4,830.8

1013.0

28-Feb-2019

5,208.1

900.8

31-Mar-2018

3,725.8

999.2

% Change (MoM)

-7.24%

12.45%

% Change (YoY)

29.66%

1.38%



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