Treasury Connect - September 2019 - II

Oct 15, 2019

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Economic Update

India’s eight core industries in August declined 0.5% compared with 2.7% in July this year and 4.7% in August 2018.

India’s current account deficit narrowed to 2% of GDP or $14.3 billion in the first quarter compared with 2.3% of GDP or $15.8 billion a year ago.

Debt Market Update

Systemic liquidity continued to be in a state of surplus, necessitating frequent reverse repo auctions from the central bank. The interbank call money rate settled at 5.60% on September 30 as against 5.20% on September 13.

Government bond prices ended lower. Yield of the 10-year benchmark paper settled at 6.70% on September 30. Intermittent uptick in crude oil prices led to fears of acceleration in domestic inflation and weighed on bond prices.

Forex Update

The rupee ended the period stronger against the US dollar, aided by hopes of inflows into the local financial market following the Centre’s corporate tax cut announcement.

Month-end dollar demand from importers, and strength in the greenback after the US Fed slashed interest rates, also weighed on the domestic currency.

Regulatory Update

The Reserve Bank of India (RBI) directed commercial banks and non-banking lenders to stop providing unregulated entities access to consumer data held by credit bureaus.

The Security Exchange Board of India (SEBI) came out with new norms that make it mandatory for companies to provide details of delayed loan repayments and possible defaults to credit rating agencies.

All data mentioned above is as on 30th 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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