Treasury Connect -September 2019 - I

Sep 20, 2019

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Economic Update

India’s annual retail inflation in August was 3.21%, up from 3.15% in July, following higher prices of food items such as meat, fish, vegetables, and pulses.

India’s industrial production growth was 4.3% in July compared with a downwardly revised 1.2% growth in June; industrial production expanded 6.5% in July 2018. Wholesale Price Index (WPI) remained flat at 1.08% in August on a sequential basis.

Debt Market Update

Systemic liquidity remained in surplus, necessitating frequent reverse repo auctions by the central bank. The interbank call money rate settled flat at 5.20% at the end of the period.

Government bond prices weakened. Concerns that an increase in government expenditure would impact the fiscal consolidation path pulled bond prices down.

Forex Update

The rupee strengthened against the US dollar tracking gains in Asian equities after the People’s Bank of China slashed the amount of cash lenders must keep in reserve.

Intermittent rise in crude oil prices and periodic dollar demand from banks on behalf of importers, limited a further rise in the rupee.

Regulatory Update

The RBI cut risk weight for consumer credit, including personal loans, to 100%; also increased the loan exposure limit of banks to a single NBFC to 20% of capital base.

The Security Exchange Board of India (SEBI) asked listed companies to settle their outstanding dues to the capital markets regulator, bourses and depositories before filing 'schemes of arrangement' such as mergers and demergers with the exchanges.

All data mentioned above is as on 15th September, 2019

The above report is sourced from CRISIL Research, a division of CRISIL Limited (CRISIL) and Aditya Birla Sun Life Mutual Fund /Aditya Birla Sun Life AMC Limited does not guarantee the accuracy, adequacy or completeness of the Data / Report and is not responsible for any errors or omissions or for the results obtained from the use of Data / Report.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

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