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Emkaynomics
Fortnightly round up
of key banking and economic indicators
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Much
along the expected lines, non-food credit growth for the fortnight ended 22nd
April’ 12 has eased to 16.9% yoy (18.2% yoy in previous fortnight). With lean
credit period and high base, we expect credit growth to remain muted for
Q1FY13
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After
an initial flip, deposit growth too has eased to 13.3% yoy (vs 14.3% in previous
fortnight). On a fortnightly basis, overall deposits are down 1%. Growth in term
deposit continues to falter at sub-15% levels. Demand deposits account for 10%
of total deposit
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LDR
has eased from highs of 78% in Mar’ 12 to 76.5% currently. With easing credit
growth, expect LDR ratio to normalize at 74-75% mark. Inc LDR stood at mere
4.7%
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Money
supply (M3) continues to remain fragile at 13.1% yoy. A lower M3 growth depicts
slowing investment / consumption demand. The ratio of M3/M1 has remained at
4.2x+ for a fairly longer period now
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LAF
window continues to remain in deficit mode with net borrowing exceeding Rs1tn
for whole of Apr’12. Twin deficit ie soaring fiscal deficit and higher CAD is
likely to keep G-sec at elevated levels. 10-yr G-sec has averaged 8.6% since
Apr’12
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Mar’12
inflation came in at 6.89%, primarily dragged by higher primary food inflation.
RBI has targeted WPI inflation at 6.5% for FY13. It has however clearly stated
that inflation remain sticky and upside risk to its estimates cannot be
eliminated.
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Call
money rates, albeit have eased post policy rate cut, continue to hover at 8%+
levels. Spreads of 10-yr Gsec over 10-yr AAA corporate bonds too has eased to
sub-100bps.
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