Dhanlaxmi Bank

23 January, 2012

Indian Economy: Rate cuts by the RBI are now due and it’s only a matter of timing when it actually starts easing the interest rate curve. Fuel has been biggest driver of inflation in FY12. Fuel index rose 9.5% until December from end of March 2011. Liquidity deficit has worsened to around 2.5% of Net Demand and Time Liabilities of the banking system. Forex reserves declined further by $1.0 billion to $292.5 billion in week ended January 14. Global Economy: US third quarter GDP growth is expected to be better on the back of resurgent auto sales and dip in jobless ratio.

16 January, 2012

Indian Economy: Industrial growth recovered to 5.9% in November on a year-on-year basis led by better-than-expected manufacturing growth. Wholesale Price Index inflation in December slowed to 7.47% from 9.11% in November. In November, RBI sold $2.9 billion to arrest further slide of the Indian rupee. M3, or broad money, supply growth in the fortnight ended December 31 eased to 15.64% while credit growth slowed to 15.94%. Global Economy: S&P downgraded ratings of nine euro nations, including France. On Friday, S&P cut AAA ratings of France and Austria by a notch to AA+ with negative outlooks. However, it reaffirmed AAA ratings on Germany, Belgium and the Netherlands. S&P downgraded Italy, Portugal, Spain, Cyprus by two notches while it lowered ratings of Malta, Slovakia and Slovenia by one level

09 January, 2012

Indian Economy: Sharp slowdown in Wholesale Price Index food inflation witnessed recently is likely to bring down the runaway overall headline inflation of the past two years. We expect WPI inflation in December could ease to around 7.5% on a year-on-year basis. There is a possibility of a rate cut on January 24 if crude oil prices and rupee vis-a vis the dollar remains stable. Gross bank credit growth for November stood lower at 17.2% on a year-on-year basis compared with 22.3% in the same month a year ago. Food inflation turned negative for the first time in six years and stood at a negative 3.36% on a year-on-year basis, against 0.42% in the previous week. Global Economy: China is expected to support growth further. Chinese Premier Wen Jiabao last week asserted that they would fine-tune monetary policy to support growth conditions in that country. China may bring down required reserve ratio further after the recent cut to infuse liquidity in the system.

02 January, 2012

Indian Economy:Indian government on Friday further increased the size of its borrowing programme for the current financial year by `40,000 crore, raising total government borrowings for 2011-12 (April-March) by around 22% from `4,17,000 crore budgeted. Balance of payments position ended marginally positive in July-September with accretion of $0.3 billion to forex reserves. External debt in Q2FY12 increased to $326.6 billion, up 6.6% from the previous quarter. Primary articles inflation in the week ended December 17 stood at 2.70% on a year-on-year basis compared with 3.78% in the previous week. Global Economy: Euro weakened against the dollar to a 12-month low last week. In December, euro weakened 3.9% against dollar because of persistent euro debt concerns.

19 December, 2011

Indian Economy: Foreign inflows trend has been mixed so far in April-October 2011 period. While foreign direct investments have been higher by 57% in April-October this year, compared with the corresponding period a year ago, foreign institutional flows have been seen a sharp contraction of 99% from same period last year. RBI has introduced measures to aid the rupee, which has depreciated around 17% since August 2011. On Friday it went further and deregulated the interest rates on NRE/NRO deposits to improve dollar inflows . Global Economy: Fitch, a leading international rating agency, lowered France’s credit outlook last week. France now joins Spain and Portugal whose ratings have been put on review for a probable downgrade

12 December, 2011

Indian Economy: Index of Industrial output in October contracted 5.1% from a year ago to hit the lowest level since March 2009. We expect that the mid-quarter monetary policy meet on Friday (December 16) will mark a formal change of course in the RBI’s anti-inflationary stance pursued so far. RBI is likely to keep policy rates unchanged at its Friday. Wholesale Price Index inflation for primary articles for the week ended November 26 stood at 6.92% on a year-on-year basis compared with 7.74% in the previous week. Global Economy:Last week European leaders finalised an agreement on Friday, which was accepted by 26, out of 27, EU nations on centralisation of budgets and punishments for those which don't meet specific targets. The UK was the only country to vote against the pact.

05 December, 2011

Indian Economy: India’s fiscal performance has worsened with slowing economic growth. In April-October, fiscal deficit expanded 89% from a year ago. Public debt increased marginally by 2.7% in Q2 FY12 to `32,13,673 crore from a quarter ago. Primary articles inflation in the week ended November 19 eased to 7.74% on a year-on-year basis from 9.08% in the previous week. Money supply and credit growth both declined in the fortnight ended November 19. Global Economy: Six central banks across the world agreed to bring down costs of dollar funding via currency swaps agreement. The Chinese central bank cut reserve ratio requirement for the country’s banks to boost growth.

28 November, 2011

Indian Economy: RBI stepped in last week to arrest further fall of rupee. Rupee ended the week at `52.20 after witnessing several intraday swings. RBI modified external commercial borrowing norms to encourage dollar liquidity in the system. It also upped interest rates in foreign currency non-residential accounts to raise dollar deposits with banks. WPI inflation for primary articles for the week ended November 12 stood lower at 9.08% comapred with 10.39% a week ago. Global Economy: Fitch, an international ratings agency, on Thursday downgraded Portugal’s sovereign debt rating to junk status. Moody’s, another leading global ratings agency, downgraded Hungary’s debt rating to junk on Friday.

21 November, 2011

Indian Economy: While WPI and CPI both reflect price information on aggregate levels, there has been a divergence in their trends in recent years, especially since 2009. Differences in composition have been major cause for the divergence. WPI inflation for primary articles in the week ended November 5 stood at 10.39% on a year-on-year basis. Money supply improved to 10.39% YoY while credit growth eased to 18.41% YoY. Global Economy: Spain became the fifth euro-zone nation to have a new government because of the sovereign debt crisis. Earlier this year, Greece and Italy got new governments and before that Ireland and Portugal saw citizens voting out the ruling parties in elections. Spanish leader Mariano Rajouy won the majority in parliamentary elections, marking the ouster of the ruling socialists in the country

14 November, 2011

Indian Economy: IIP growth in September hit a two-year low of 1.9% on a year-on-year basis. Sharply lower growth confirms fear of slowdown earlier put aside by the Reserve Bank of India. Trade deficit in October widened to a 17-year high of $19.6 billion. Wholesale Price Index inflation in October rose marginally from a year ago to 9.73% from 9.72% in September. Global Economy: Lucas Papademos took over as prime minister of the interim government of Greece. Mario Monti took over as PM of Italy from Silvio Berlusconirwho resigned after his government lost majority in parliament in a vote on the austerity measures bill.

08 November, 2011

Indian Economy : M3, or broad money supply, growth in the fortnight ending October 22 slowed to 14.44% from a year ago compared with 16.23% in the previous year. Money supply growth rate is now below RBI as target of 15.5% for FY12. Slowing M3 growth rate indicates that the high interest rate regime has made a dent on economic activity. WPI primary articles inflation in the week ended October 22 stood at 12.08%. Forex reserves rose to $310.4 billion in the week ending Oct 29, 2011. Global Economy : Greece surprised the Euro-zone leaders on November 2 with an announcement of referendum on the new bailout. However, the plan for referendum was dropped as lawmakers rebelled against Prime Minister George Papandreou's unilateral decision

31 October, 2011

Indian Economy:Indian rupee's depreciation in the past two months against major global currencies has resulted in a 6.3% decline in the six-currency Real Effective Exchange Rate since August. REER, which measures a currency's competitiveness against other major currencies, is an indicator of A its relative value versus foreign currencies. RBI's noninterventionist approach despite rupee's recent slide shows the central bank is comfortable with the weakness in the Indian unit that has been triggered by international events. Global Economy : On October 27, EU leaders concluded marathon talks in Brussels with an agreement on the plan to bail out Greece. In the crisis summit, 14th in 21 months, the leaders A patched together a rescue plan, which included asking bondholders to take 50% losses on Greece debt and raising the capacity of European Financial Stability Fund to 1 trillion Euros ($1.4 trillion).

24 October, 2011

Indian Economy:Indian rupee continued its weakening trend against the dollar and on Friday closed at a 30month low of `50.07 after hitting an intra-day low of `50.30. Rupee has depreciated around 13.5% against dollar since August in one of the biggest annual drops since 2009. WPI primary articles inflation for the week ended October 8, 2011, stood at 11.18% on an annual basis compared with 10.60% a week ago. Money supply growth eased to 16.23% YoY and credit growth to 19.45% YoY during the fortnight. Global Economy: On October 23, EU leaders held marathon talks in Brussels over the plan to bailout Greece. EU leaders discussed on the plan to aid banks and bail out Greece but ruled out the possibility of using ECB to expand the bail-out fund. EU leaders are expected to finalise the rescue plan by October 26.

17 October, 2011

Indian Economy: Persisting high inflation and Reserve Bank of India’s increased commitment to contain inflation, despite slowing growth, makes us believe the central bank will go ahead with a 25-basis-point rate hike at its monetary policy meet on October 25. Industrial growth in August slowed to 4.1% on a year-on-year basis despite a favourable low base. WPI inflation in September stood at 9.72% YoY. Exports growth slowed to 37% on a year on year basis from 44% a month ago. Global Economy: G-20 nations urged EU to plan a strategy in a week to fix debt crisis, which endangers the world. The meeting has set a October 23 deadline for EU nations to work out a plan before the next G-20 meeting in Brussels.

10 October, 2011

Indian Economy : Commerce Minister Anand Sharma said on Friday that the government will soon announce export incentives to allay concerns of an exports slowdown. In a possible early trend, exports in August dropped sharply to $24.3 billion from $29.3 billion in the previous month. Wholesale Price Index primary articles annual inflation for the week ended September 24 decelerated to 10.84% from 11.43% a week ago. Money supply and credit growth in the fortnight ended September 24, 2011 declined. Global Economy: Fitch, a leading global ratings agency, downgraded Spain and Italy Friday citing high debt and poor economic prospects.

03 October, 2011

Indian Economy :Government of India increased its borrowing programme for FY12 by `52,872 crore. Improvement in net capital flows resulted in favourable balance of payments (BOP) position in Q1FY12 with forex reserves rising $5.5 billion. External debt in Q1FY12 increased to $316.9 billion, up 3.4% from the previous quarter.WPI primary articles inflation for the week ended September 17, 2011, stood lower at 11.43% YoY compared with 12.17% YoY a week ago. Global Economy : European finance ministers are meeting today in Luxembourg to discuss rescue measures and also to increase the size of the rescue fund. In a positive development, the Greece Parliament approved spending cuts by $8.8 billion to qualify for the IMF and EU rescue package.

26 September, 2011

Indian Economy : Reserve Bank of India (RBI) has issued draft guidelines for alloing new entrants into the banking industry, particularly from the corporate sector and for Non Banking Financial Companies. WPI primary articles inflation for the week ending September 10, 2011 stood at 12.17% YoY. Money Supply and credit growth in the fortnight ending September 10, 2011 came down to 16.40% YoY and 20.40% YoY respectively Global Economy : Standard & Poor’s, a leading credit rating agency, cut Italy’s credit rating on September 21, 2011, by a notch to ‘A’. S&P has cited economic conditions and political instability as reasons for the downgrade. World Bank & IMF annual meeting at the conclusion said it will work towards strong and inclusive growth and also asserted that it is committed to Millennium goals and food security.

19 September, 2011

Indian Economy : Sharp depreciation of INR against dollar in the last month is going to make inflation management difficult for the Government. Rupee depreciated by 4.91% in last month, 3.38% in the last fortnight and 1.02% last week against the dollar. WPI inflation in August 2011 rose to 9.78% YoY compared with 9.22% YoY a month ago. Trade deficit widened to $14.1 billion in August as exports growth in August came down to 44% YoY compared with 88% YoY a month ago. Global Economy: European Union and IMF are going to decide this week whether Greece is eligible for next round of payments to avoid default.

12 September, 2011

Indian Economy : IIP growth in July came down to 3.3% YoY compared with 8.8% YoY a month ago largely due to negative growth rate seen in capital goods of (-)15.2% YoY. Fiscal deficit in the first quarter of FY12 stood 304% higher from the corresponding period of the previous year. Forex reserves have crossed the 2008 peak of $316.2 billion. Global Economy: Finance minister and central bankers of Group Seven (G7) nations on September 9, 2011, pledged for more support to stimulate the global economy.

05 September, 2011

Indian Economy : Q1 FY12 GDP growth came down to 7.7% YoY compared with 8.8 % YoY in the same quarter a year ago. The slowdown in GDP growth was largely in line with our expectations. Slower industrial growth of 5.1% YoY pulled down GDP growth. Services growth of 10% YoY and agriculture growth of 3.9% YoY lifted the declining GDP numbers. WPI primary articles inflation on August 20, 2011, increased to 12.93% YoY from 12.40 % YoY a week ago. Global Economy : Brazil became the second country in G-20 after Turkey to go for a rate cut. Brazil’s rate cut came as a surprise. It reduced benchmark interest rates by 50 bps to 12%

29 August, 2011

Indian Economy : RBI released its Annual report for 2010-11. RBI acknowledged downside risks to growth. WPI primary articles inflation increased to 12.40% YoY. Money supply and credit growth both increased in the fortnight ending August 13, 2011. Global Economy : Moody one of the world’s leading rating agency on Aug 24, 2011 down graded Japan’s sovereign debt rating to Aa3 from Aa2 before.

22 August, 2011

Indian Economy : India’s total outstanding public debt increased by 5.9% to `31,49,996 crore in the first quarter of FY12 from `29,75,628 crore in end FY1. India’s total public debt as a percentage of GDP stood 35.1% in Q1FY12, lower from 37.8% at end of FY11. RBI on August 18, 2011, released the minutes of the Technical Advisory Committee (TAC) meeting held on July 20, 2011, in the run up to the First Quarter Monetary Policy on July 26, 2011. Global Economy: The introduction of Joint Euro Area bonds has met with vehement opposition from Germany after the European Commission recently discussed the possibility of such bonds.

16 August, 2011

Indian Economy: IIP growth for June stood higher at 8.8% YoY compared with 5.9% YoY a month ago, largely due to a surge in capital goods growth by 37.7% YoY during the month. WPI inflation in July 2011 declined to 9.22% YoY compared with 9.44% YoY a month ago largely due to a high base effect. Exports in July 2011 registered a superb growth of 82% YoY. Global Economy: The Federal Reserve Board has promised to keep interest rates lower till 2013 to stimulate the economy.

08 August, 2011

Global Economy: Standard and Poor’s (S&P), one of the world’s leading rating agencies, has downgraded the US long term debt by a notch, from AAA to AA+ . The US downgrade is likely to result in volatility in the global financial markets, especially in the equities markets in the short run. Indian Economy: FM has tabled in Parliament the first batch of supplementary grants for FY12 of `34,725 crore for approval. Food articles inflation rose to 8.04% YoY in the week ending July 23, 2011, compared with 7.33% YoY a week ago largely due to base effect. Exports in June 2011 grew by 47% YoY. Forex reserves increased by $ 2.3 billion.

01 August, 2011

Indian Economy: India ranks third in FDI attractiveness according to the latest world investment report by UNCTAD. Global FDI flows improved by 5% YoY in 2010 to $1.24 trillion. Food inflation eased further. Money Supply & credit growth both declined. PM economic advisory council released economic outlook for FY12. Global Economy: US lawmakers have reached an agreement over raising debt ceiling and have averted a debt crisis.

25 July, 2011

Indian Economy: RBI is expected to raise interest rates by 25 bps in first quarter monetary policy meet on July 26, 2011. Food inflation dipped to two year low of 7.58% YoY. Forex reserves declined marginally to $ 314.5 billion. Global Economy: Greece received second bailout of $228 billion within a span of one yea from Euro nations.

18 July, 2011
WPI inflation for June 2011 stood at 9.44% YoY compared with 9.06% YoY in May due to rise in the index by 0.9% MoM. Money Supply (M3) growth improved marginally to 17.10% YoY during the fortnight ending July 2, 2011 while SCB credit growth declined to 19.90% YoY. US could face a rating downgrade if it fails to raise its debt ceiling of $14.29 trillion by August 2, 2011.


11 July, 2011

Indian Economy: Cumulative rainfall so far in the Monsoon season (June, 01, 2011 till July 06, 2011) for the whole country stood 217.6 mm which is 1% higher than the normal. Water storage levels of 81 important reservoirs is 195% higher compared to last year. Sowing has been higher for sugarcane, rice, coarse cereals and pulses while has been lower for cotton and oilseeds. Global Economy: China & ECB have hiked interest rates by 25 bps to tackle inflation. Moody has cut Portugal debt rating by four notches to junk.

04 July, 2011
BOP position turned favourable in FY11 with addition of $13.1 billion to forex reserves. Concern of rising Current Account Deficit (CAD) were put to rest due to superb exports growth in FY11. India's External debt of India in FY11 increased by $44.9 billion to $305.9 billion. WPI Primary articles inflation rate declined to 11.84% YoY for the week ending June 18, 2011.


27 June, 2011
WPI Primary articles inflation eased to 12.62% YoY due to a high base. Forex reserves increased marginally to $ 310.6 billion. Globally inflation has started to threaten economic growth and investors' confidence. China has been far more aggressive than India to tackle inflation. Developed nations such as US and Euro zone are also witnessing rising inflation but continue to maintain easy monetary stance as weak economic prospects continues to force these economies to focus on growth. ECB's recent anti inflation stance is expected to change complexion of its monetary policy.


20 June, 2011
WPI Primary articles inflation rose to 12.86% YoY. Money supply accelerated to 20.78% YoY while credit growth slowed to 20.90% YoY. Forex reserves declined to $ 310.5 bn.


13 June, 2011
IIP growth moderated in April 2011 to 4.3%YoY. WPI Primary articles inflation rate rose to 11.52%YoY . We expect a 25 bps hike in the coming monetary policy review. Forex reserves increased to $312.9 bn. Yield curve has turned flattish as yields between 3 month and 11 year G securities has narrowed.


06 June, 2011
WPI Primary articles inflation rate moderated to 10.87% YoY for the week ending May 21, 2011. Money supply declined to 16.81% YoY in the fortnight ending May 21, 2011. Trade deficit for April 2011 expanded to $9 billion as exports growth moderated. Forex reserves rose to $310.2 billion in the week ending May 28, 2011.


23 May, 2011
WPI Primary articles inflation rate moderated to 10.94% percent for the week ending May 7, 2011. Money supply declined to 16.92 % YoY in the fortnight ending May 7, 2011. Forex reserves declined to $307.5 billion in the week.


18 May, 2011

IIP threw a surprise with 7.3% YoY growth in March 2011 WPI inflation eased to 8.66% YoY in April 2011, largely due to high base Money supply grew to 17.55% YoY for the week ending April 22, 2011

28 April, 2011
Primary articles inflation for the week ending 16 April 2011 grew further to 12.08% YoY. Sharp jump in minerals prices results in higher primary articles inflation.


21 April, 2011
Primary articles inflation for the week ending April 09, 2011 grew to 11.96% YoY. Sharp rise was witnessed in non food articles prices. We expect further interest rates hike in annual monetary policy meeting on May 3, 2011.


23 August, 2010

The primary articles index for the week ended August 7, 2010, declined from 308 to 307.8 (WoW). The primary articles? inflation fell to 14.85% (YoY). The primary articles category is broadly divided into two sub-sectors -- food and non-food

16 August, 2010

The index of industrial production (IIP) for June 2010 stood at 7.1% (YoY) -- lower than market expectations of 8.1% (Newswire 18, YoY). The figure for April was revised lower from 16.7% to 16.5%.

09 August, 2010

Exports in June 2010 stood at $17.8 billion, increasing 30% (YoY). Imports stood at $28.3 billion, increasing 23%. Within imports, oil imports were recorded at $8.3 billion, up 27%. The trade deficit for June 2010 stood at $10.6 billion compared to the $11.3 billion defi-cit in May 2010. The deficit declined in June as export growth was higher than import growth.

02 August, 2010

The primary articles index for the week ended July 17, 2010, increased sharply from 307.5 to 308.8 (WoW). The primary articles inflation for the week ended July 17, 2010, decreased to 14.5% (YoY). Inflation declined despite a sharp increase in index, mainly because of the base-effect.

26 July, 2010

It discusses the economic backdrop against which the Reserve Bank of India will shape its First Quarter Review of the Annual Monetary Policy 2010-11 on July 27 (Tuesday). It dissects the observations made by the Prime Minister's Economic Advisory Council, which is headed by former RBI Governor Dr C Rangarajan.

19 July, 2010

An analysis of the Wholesale Price Index figure released for June 2010 A look at the monetary aggregates

12 July, 2010

A write-up on the latest Industrial Production numbers. An analysis of IMF's July estimates for economic growth in the world, and in India. The weekly dissection of inflation trends.

05 July, 2010
The current edition looks at the balance of payments situation, as well as analyses the economic reasons behind RBI's recent rate action.


28 June, 2010
Overall, food inflation trends remain highly volatile. The index declined in one week. This was followed by equally sharp surges in subsequent weeks. Another worrisome trend is revision of inflation data.


21 June, 2010
The primary articles index for the week ended June 5, 2010, declined from 301.7 to 299.5 (WoW). The primary articles‘ inflation decreased to 16.86% (YoY). The primary articles category is broadly divided into two sub-sectors - food and non-food.


14 June, 2010
The index of industrial production (IIP) for April 2010 stood at 17.6% (YoY) - much higher than the market expectations of 13.8% (Newswire 18, YoY). The figure for March was revised up-wards from 13.5% to 13.9%.


07 June, 2010
Exports for April ’10 were noted at $16.9 billion, increasing by 36.2% (YoY). Imports stood at $27.3 billion, increasing by 43.3%. Within imports, oil imports recorded a rise of 70.5% at $8.1 billion. Trade deficit for April ’10 was at $10.4 billion, the highest since December ’08.


31 May, 2010
Gross domestic product (GDP) for FY 2009-10 stood at 7.4%, higher than CSO’s advance estimate of 7.2%. The higher than expected growth is on account of upward revision in agriculture and industry sub-sectors. In the Jan-Mar ’10 quarter, growth stood at 8.6% (YoY) - in line with market expectations.

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