indian economics
India | Strategy
19 July 2013
Economics
Acceptance of high bids in auctions….
8.6
(%)
Source: RBI
… would see further rise in yield curve
10.0
9.5
9.0
8.5
8.0
7.5
0.0
1.1
2.2
3.4
4.5
5.6
6.7
7.8
8.9
10.0
11.1
12.3
13.4
14.5
15.6
16.7
17.8
18.9
7.0
16-Jun
17-Jun
18-Jun
19-Jul
Source: NSE, Elara Securities Research
OIS reflecting a policy rate hike…
9.0
8.5
8.0
7.5
7.0
1-yr OIS
19-Jul
17-Jul
15-Jul
13-Jul
9-Jul
11-Jul
7-Jul
5-Jul
3-Jul
6.5
5-yr OIS
Source: Bloomberg, Elara Securities Research
…making move on CRR plausible
10
8
6
Jun-13
Jan-13
Oct-11
Mar-12
May-11
Dec-10
Jul-10
2
Aug-…
4
Feb-10
Of course, liquidity has to be much lower than current floor of LAF for the current measures to succeed. Also, CB has more privy information on whether liquidity is fuelling speculation and if evidences to that effect are found, it clearly leaves a CRR hike as an impending move. Obviously, after coming this far on current stance, chance of a premature policy withdrawal looks slim.
GS2023
Sep-09
CRR remains a policy option: CB's task of managing INR through the liquidity channel is challenging. Chances of more OMO sales had come off post yesterday’s fiasco but with today’s acceptance of higher bids in primary auction, even that cannot be ruled out in the near term. However, if today’s bid acceptance was a one-off giveaway; possibility of other bold measures cannot be ruled out.
GS2019
Apr-09
RBI is in the market for a long haul: We believe that the current stance will remain in vogue atleast till September because that is when US Fed is expected to give clarity on the possible withdrawals on the QE program. Moreover, CB’s measures have to be more than short-term quick fixes because the underlying concern on INR stems from an unsustainable and rigid CAD funded through volatile capital flows
19 July 2013
Economics
Acceptance of high bids in auctions….
8.6
(%)
Source: RBI
… would see further rise in yield curve
10.0
9.5
9.0
8.5
8.0
7.5
0.0
1.1
2.2
3.4
4.5
5.6
6.7
7.8
8.9
10.0
11.1
12.3
13.4
14.5
15.6
16.7
17.8
18.9
7.0
16-Jun
17-Jun
18-Jun
19-Jul
Source: NSE, Elara Securities Research
OIS reflecting a policy rate hike…
9.0
8.5
8.0
7.5
7.0
1-yr OIS
19-Jul
17-Jul
15-Jul
13-Jul
9-Jul
11-Jul
7-Jul
5-Jul
3-Jul
6.5
5-yr OIS
Source: Bloomberg, Elara Securities Research
…making move on CRR plausible
10
8
6
Jun-13
Jan-13
Oct-11
Mar-12
May-11
Dec-10
Jul-10
2
Aug-…
4
Feb-10
Of course, liquidity has to be much lower than current floor of LAF for the current measures to succeed. Also, CB has more privy information on whether liquidity is fuelling speculation and if evidences to that effect are found, it clearly leaves a CRR hike as an impending move. Obviously, after coming this far on current stance, chance of a premature policy withdrawal looks slim.
GS2023
Sep-09
CRR remains a policy option: CB's task of managing INR through the liquidity channel is challenging. Chances of more OMO sales had come off post yesterday’s fiasco but with today’s acceptance of higher bids in primary auction, even that cannot be ruled out in the near term. However, if today’s bid acceptance was a one-off giveaway; possibility of other bold measures cannot be ruled out.
GS2019
Apr-09
RBI is in the market for a long haul: We believe that the current stance will remain in vogue atleast till September because that is when US Fed is expected to give clarity on the possible withdrawals on the QE program. Moreover, CB’s measures have to be more than short-term quick fixes because the underlying concern on INR stems from an unsustainable and rigid CAD funded through volatile capital flows