Emkaynomics |
Fortnightly round up of key banking and economic indicators |
n Non-food credit growth at 17.4%yoy is on a decline and also appears on a lower end primarily due to the higher base-effect of previous year. Despite busy season, growth in non-food credit is down 1% over Q2FY12
n With a view to meet RBI target of 18% yoy in FY12, credit growth for balance period should be 2x of actual growth YTD. Given higher base of previous year and elevated interest rates, the full-year target seems a bit on upper-end
n Growth in total deposits at 16.4% yoy too is on a downward trajectory and has been dragged by slower accretion in demand deposits. Demand deposits at sub-10% are down 12% yoy. On other hand, time deposits are up 21% yoy
n While CD ratio has remained stable; inc. CDR has inched to 60% levels. Money supply (M3) growth came in at 15.2% yoy. M1 growth at <2% yoy clearly reflects the slower growth in circulation of money into the system
n Liquidity remained tight with net outflow at Rs1,050bn (1.9% of NDTL). However, recent OMO operations have eased liquidity back to ~1% levels
n G-sec yields too have eased by ~20bps+ from their recent highs. 10-yr/1-yr G-sec stood at 8.67%/8.41% respectively on Dec-5. The short end curve is back to Q2 levels leaving minimal risk of MTM losses
n Call money rates have moved in tandem with repo rate. Food inflation has eased to 8% in Nov 19. Given three-consecutive weeks of deceleration in primary and food articles, we expect inflation to ease to 9.2% for Nov’11
Regards,
Kashyap Jhaveri |
Research Analyst | Emkay Global Financial Services Ltd. | www.emkayglobal.com | Email : kashyap...@emkayglobal.com |
Board No. : +91-22-6612 1212 | Extn. : 249 | DID : +91-22-6612 1249 | Mob : +91-98202 41712 | Fax : +91-22-6624 2410 | |
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