India Economics Update What next for the rupee? Markets largely shrugged off the recent fall in the rupee to a record low against the US dollar, and were right to do so. With other EM currencies also weakening and inflation higher in India than... 30th November 2016 · 1 min read
India Economics Update Demonetisation sparks further bond market rally The government’s surprise demonetisation announcement has led to a sharp rise in bank deposits over the past couple of weeks. The rush of liquidity in the system has led to a fall in interbank rates... 21st November 2016 · 1 min read
India Economics Update Assessing the early impact of demonetisation Despite many anecdotal reports of turmoil in the wake of last week’s surprise demonetisation, and undoubted hardship for many, the early evidence suggests that the economic impact of the move has been... 18th November 2016 · 1 min read
India Economics Update External position healthy despite wider trade deficit Although the monthly trade deficit widened a touch in October, a number of factors should keep it in check over the coming months. This should keep India’s financial markets relatively secure in the... 15th November 2016 · 1 min read
India Economics Update PM Modi steps up anti-corruption drive The announcement late yesterday that India’s two largest denominations of banknotes have ceased to be legal tender with immediate effect is likely to weigh on economic activity in the near term, with... 9th November 2016 · 1 min read
India Economics Update Drop in food inflation has run its course Consumer price inflation is likely to have edged up in October, as the recent sharp slowdown in food inflation appears to have bottomed out. But with the central bank focused on supporting growth, the... 7th November 2016 · 1 min read
India Economics Update GST begins to take shape Confirmation that a consensus has been reached on the various rates of the new Good and Services Tax (GST) marks another important step towards its implementation. A multi-tiered GST is far from... 4th November 2016 · 1 min read
India Economics Update Government likely to miss privatisation target With more than half of the fiscal year over, the government’s aim of raising nearly INR600bn through asset sales of various state-owned companies looks unrealistic. Faced with a number of state... 2nd November 2016 · 1 min read
India Economics Update Revisiting the NPL problem Another sharp rise in the non-performing loan (NPL) ratio in Q2 and recent stark warnings from the IMF have refocussed attention on India’s ailing banking sector. The Reserve Bank of India (RBI) has... 28th October 2016 · 1 min read
India Economics Update Bond market boosted by dovish RBI Indian bonds have continued to rally this month after the Reserve Bank of India (RBI) delivered a surprise rate cut and left the door open for further loosening. However, we fear that policy could be... 20th October 2016 · 1 min read
India Economics Update What does the new estimate of the neutral rate tell us? While the RBI is probably correct in suggesting that global neutral interest rates have fallen, this does not necessarily mean that India’s own neutral rate has fallen too, as the RBI suggested when... 19th October 2016 · 1 min read
India Economics Update Exports showing signs of recovery Trade data for September showed the strongest annual growth in export values in almost two years. Looking ahead, exports should continue to recover, but the government’s target of nearly doubling... 17th October 2016 · 1 min read
India Economics Update Dovish RBI risks stoking inflation pressures Consumer price inflation probably eased in September, which may bolster the more dovish position the RBI adopted at its policy meeting this week. But a looser monetary stance is likely to add to... 6th October 2016 · 1 min read
India Economics Update More dovish RBI may have to reverse course in 2017 Today’s surprise rate cut by the Reserve Bank of India sends a signal that the new governor and MPC will prioritise growth even at the risk of missing targets for inflation. That’s a break from the... 4th October 2016 · 1 min read
India Economics Update FDI inflows should recover soon Concerns in some quarters over the slowdown in foreign direct investment (FDI) inflows in Q2 appear to be overdone. For a start, a smaller current account deficit means that India is now far less... 30th September 2016 · 1 min read
India Economics Update Government moves a step closer to establishing new MPC The government’s announcement today of the names of three members marks another step towards the creation of a policy-setting monetary policy committee (MPC). The announcement also confirms that the... 22nd September 2016 · 1 min read
