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☆ Indian economy to exceed growth estimates after strong Q2 beat : economists
▼ + stars: | 2023-12-01 | by ( ) www.reuters.com time to read: +3 min

The country's economy expanded 7.6% in the July-September quarter, trouncing estimates of a 6.8% rise, data released on Thursday showed. He had an earlier forecast growth at 6.7%. The government stuck to its 6.5% growth forecast for the year, but chief economic advisor V. Anantha Nageswaran said he was "more comfortable with an upside to this projection than before". Reuters GraphicsCitigroup revised its growth forecast for the financial year upwards by 50 basis points to 6.7% citing a pick-up in investment activity. "This reaffirms our view of sustained investment recovery," the Wall Street bank's chief India economist Samiran Chakraborty said in a note.

Persons: Ranita Roy, Saumya Kanti Ghosh, V, Anantha Nageswaran, Gross, Samiran Chakraborty, Chakraborty, Radhika Rao, Gaura Sen Gupta, Ira Dugal, Nivedita Organizations: REUTERS, Rights, State Bank of India, Reuters Graphics Citigroup, Street bank's, DBS, IDFC, Bank Economics Research, Thomson Locations: Kolkata, India

☆ Rupee set to rally on India's inclusion in JPMorgan bond index
▼ + stars: | 2023-09-22 | by ( ) www.reuters.com time to read: +3 min

Non-deliverable forwards indicate the rupee will open at around 82.80-82.82 to the U.S. dollar, compared with 83.09 in the previous session. Indian government bonds will be included in the Government Bond Index-Emerging Markets index and the index suite, JPMorgan said on Friday. Inclusion will start on June 28, 2024, and extend over 10 months with 1% increments on its index weighting. India's inclusion in the JPMorgan index increases the probability of inclusion into the Bloomberg Global Aggregate Bonds Index, which, IDFC First Bank estimates, could lead to additional inflows of $15 billion to $20 billion. The dollar index reached 105.74 on Thursday, the highest in over six months.

Persons: Francis Mascarenhas, Nimesh Vora, Savio D'Souza Organizations: REUTERS, Rights, U.S ., Government Bond, JPMorgan, IDFC, Bank, Bloomberg, Treasury, U.S . Federal, ING Bank, Brent, Thomson Locations: Mumbai, India, Rights MUMBAI

☆ India's banking system liquidity deficit jumps to over 4-year high
▼ + stars: | 2023-09-20 | by ( Dharamraj Dhutia | ) www.reuters.com time to read: +2 min

MUMBAI (Reuters) - India’s banking system liquidity deficit is at its widest in over four years ago, amid tax outflows and the lack of any major inflows, traders said on Wednesday. REUTERS/Hemanshi Kamani/File PhotoBanking system liquidity deficit jumped to 1.47 trillion rupees ($17.67 billion) as on September 18, the highest single day shortfall since April 23, 2019, while banks have borrowed a record 1.97 trillion rupees from the central bank’s Marginal Standing Facility window. Advance tax payments took place last week, while outflows towards Goods and Services tax will be completed by Wednesday, with bankers estimating aggregate outflows of up to 2.50 trillion rupees. Moreover, “another drain on rupee liquidity could be from RBI’s (Reserve Bank of India) FX intervention if depreciation pressures on the rupee persist,” said Gaura Sen Gupta, an economist with IDFC First Bank. The liquidity deficit will, however, narrow towards the end of this month and the beginning of October as government spending picks up and the I-CRR is completely wound down.

Persons: Hemanshi, ”, Gaura Sen Gupta, Upasna Bhardwaj Organizations: REUTERS, Goods, Services, Reserve Bank of India, IDFC, Bank, Kotak Mahindra Bank Locations: MUMBAI, India, RBI’s

India's annual retail inflation (INCPIY=ECI) rose sharply to 7.44% in July from 4.87% the previous month. Reuters Graphics"The spurt in CPI inflation in July 2023 was on expected lines, however, 7.44% retail inflation was totally unexpected," said Devendra Pant, economist at India Ratings. Food inflation, which accounts for nearly half of the overall consumer price basket, hit a staggering 11.51% in June as compared with 4.49% in June. Retail food inflation was at its highest since January 2020. Even a moderate rise in food inflation tends to anger voters and Dhiraj Nim, economist at ANZ Research, said further measures may be required from the government.

Persons: Devendra Pant, Research's Gaura Sen Gupta, Pant, Narendra Modi's, Dhiraj Nim, Nikunj Ohri, Chizu Nomiyama, Christina Fincher Organizations: REUTERS, DELHI, Reuters, Reserve Bank of India, ANZ Research, Thomson Locations: Kolkata, India

☆ India is said to be an 'oasis' in the desert. Here are some sectors to watch for
▼ + stars: | 2023-07-21 | by ( Charmaine Jacob | ) www.cnbc.com time to read: +8 min

Major economies were hit by higher inflation during the Covid-19 pandemic, but India's inflation was already elevated. In June, India's inflation rate was 4.81%, which remains within the Reserve Bank of India's tolerance band of 2% to 6%. There is a paradigm shift and flight of capital from Indian households savings to equity to contribute to the India growth story," Azeez told CNBC's "Squawk Box Asia" last week. "So whichever way one looks at the economic numbers, India appears as an oasis in the global desert," he added. watch nowHowever, Matthew Asia's Mittal said that instead of buying into pharmaceutical companies, upstream companies such as Syngene will be a good investment opportunity.

Persons: Goldman Sachs, Darren Robb, Feroze Azeez, Anand, Azeez, CNBC's, Nifty, it'll, Soumya Rajan, Peeyush Mittal, Nilesh Shah, Shah, Financials, Rajan, Waterfield's Rajan, We've, we've, Hindenburg, Matthews, Mittal, India's, Nestle, Kotak's Shah, Punit Paranjpe, Matthew Asia's Mittal Organizations: Bank, Getty, Wealth, Reserve Bank, Monetary Fund, Waterfield, Matthews Asia, CNBC, Mahindra Asset Management, IDFC, IDFC Ltd, HDFC Bank, Housing Development Finance Corporation, India's HDFC Bank, ICICI Bank, Bajaj Finance, Mahindra Finance, Nestle, World Bank, Nurphoto, Hindustan Unilever, Britannia Industries, Manufacturing Global, Godrej Aerospace, Afp Locations: India, United Kingdom, Japan, Mumbai, China, Nestle India, LuLu, Lulu, Kerala

☆ India forex reserves top $600 billion, rise to near 15-month high
▼ + stars: | 2023-07-21 | by ( Siddhi Nayak | ) www.reuters.com time to read: +2 min

They rose by $12.74 billion from the week earlier - the biggest gain in four months - having risen by a total of $3.08 billion in the prior two weeks. "A major portion of the week-on-week jump in forex reserves is driven by revaluation gains due to dollar weakness and reduction in U.S. Treasury yields," said Gaura Sen Gupta, India economist at IDFC FIRST Bank. The current level of forex reserves, along with the RBI's forward foreign exchange book of $19.3 billion, is enough to cover over 11 months of imports, Reuters' calculations showed. In the week for which the forex reserves data pertains, the rupee had logged its best week in four. Foreign Exchange Reserves (in million U.S. dollars)Source text: (https://www.rbi.org.in/scripts/BS_PressReleaseDisplay.aspx)Reporting by Siddhi Nayak; Editing by Sohini Goswami and Nivedita BhattacharjeeOur Standards: The Thomson Reuters Trust Principles.

Persons: Gaura Sen Gupta, Sen Gupta, Siddhi Nayak, Sohini Goswami, Nivedita Organizations: Treasury, IDFC FIRST Bank, Reuters, Reserve Bank of India's, National Securities Depository Limited, Foreign Exchange, Siddhi, Thomson Locations: MUMBAI, U.S, India

☆ India's IDFC First Bank says merger will boost credit growth
▼ + stars: | 2023-07-11 | by ( Sumathi Bala | ) www.cnbc.com time to read: +1 min

155 shares of IDFC First Bank will be alloted for 100 shares of IDFC according to an Indian media report. India's IDFC First Bank expects to see robust credit growth following its recent merger, according to managing director and CEO V. Vaidyanathan. Last week, IDFC First Bank said its board had approved its merger with IDFC Ltd. , the latest in a wave of consolidation in India's financial sector. "For India's credit market, let me say about a 15% credit growth would be a fair expectation in the near future. And for our bank, a 25% credit growth would be a fair expectation with stable asset quality."

Persons: India's, Vaidyanathan, CNBC's Organizations: IDFC, Bank, IDFC Ltd, HDFC Bank, Housing Development Finance Corporation Locations: Mumbai, India

Despite hitting an 18-month low of 4.70% in April, analysts do not expect India's inflation to fall to the Reserve Bank of India's (RBI) 4% medium-term target in a sustainable manner for some time. India has raised rates by 250 basis points (bps) since May 2022, but surprised analysts in April by keeping them unchanged. India's hold on rates contrasts with recent central bank actions elsewhere. "Our goal is to achieve the inflation target of 4% and keeping inflation within the comfort band of 2-6% is not enough," Das said. Das said that the central bank would remain "nimble" with its liquidity operations amid spikes in overnight rates despite surplus liquidity in the banking system.

Persons: Shaktikanta Das, OIS, Das, Michael Patra, Suvodeep Rakshit, Gaura Sen Gupta, Swati Bhat, Sudipto Ganguly, Ira Dugal, Krishna N, Sam Holmes, Kim Coghill Organizations: REUTERS, Reserve Bank of India's, MPC, Reserve Bank of Australia, Bank of Canada, Reuters, Reuters Graphics Reuters, IDFC, Thomson Locations: Delhi, India, Anushree, MUMBAI

☆ About 80% of Indians choose to deposit withdrawn 2000-rupee notes, boost bank deposits - bankers
▼ + stars: | 2023-06-07 | by ( Siddhi Nayak | ) www.reuters.com time to read: +2 min

MUMBAI, June 7 (Reuters) - About three-fourths of Indians are choosing to deposit the recently withdrawn 2000-rupee notes into bank accounts so far rather than exchanging them for smaller denominations, with the trend likely to boost bank deposits, bankers said. In May, the Reserve Bank of India (RBI) said it would withdraw these high-value notes from circulation and permitted their exchange or deposit until Sept. 30. When announced, the value of these notes in circulation was 3.6 trillion rupees ($43.61 billion), the RBI said. Though the total quantum of notes deposited or exchanged so far is not available, six public and private sector bankers Reuters spoke to said over 80% of the notes received by them have been deposited into accounts. The initial assumption is the overall bank deposit base would increase by at least 1.5 trillion rupees, with SBI contributing 22%-25%, the SBI official said.

Persons: Virat Diwanji, Gaura Sen Gupta, Dipanwita Mazumdar, Siddhi Nayak, Swati Bhat, Sonia Cheema Organizations: Reserve Bank of India, Reuters, State Bank of India, Bank of Baroda, Union Bank of India, Bank of India, Kotak Mahindra Bank, IDFC FIRST Bank, SBI, Siddhi, Thomson Locations: MUMBAI, BOB.NS, India

☆ India's forex reserves at comfortable level due to RBI, dollar - economists
▼ + stars: | 2023-05-09 | by ( Nimesh Vora | ) www.reuters.com time to read: +2 min

MUMBAI, May 9 (Reuters) - India's foreign exchange reserves are at a comfortable level currently, benefiting from the Reserve Bank of India's persistent intervention and the likelihood of less volatile revaluation changes, economists said. Reuters GraphicsSince October 2022, the RBI has been rebuilding the reserves, taking advantage of the rupee's recovery. Reuters GraphicsSince October, "comfort on the level of reserves has improved significantly," said Gaura Sen Gupta, economist at IDFC First Bank. "Reserves (both spot and forwards) are now equivalent to 10.4 months of import cover, compared with about 8.9% in Oct 2022." And provides an added layer of comfort as far as the adequacy of forex reserves is concerned.

☆ India c.bank set to raise rates 25 bps on elevated inflation, keep hawkish stance
▼ + stars: | 2023-04-06 | by ( Swati Bhat | ) www.reuters.com time to read: +3 min

The central bank has already raised rates by 250 basis points since May last year. Core inflation, which excludes volatile food and energy components, was also expected to have stayed high between 6.05%-6.12% in February, according to estimates from three economists. "The policy space to focus on inflation is lent by domestic growth conditions holding-up, supported by urban consumption and services sector recovery," Sen Gupta said. Early signs of a slowdown in India are also visible in easing imports and plateuing bank credit demand. The Reuters Poll showed that a majority of respondents, 20 of 36, expect the central bank would maintain its 'withdrawal of accommodation' stance while the remaining 16 said it would shift to neutral.

REUTERS/Thomas White/IllustrationMUMBAI/NEW DELHI, April 3 (Reuters) - A surge in India's services exports, which hit a record high in the October-December quarter, is expected to shield the economy from external risks as a slowing global economy will likely weigh on the country's merchandise exports. Services exports will likely surpass goods exports by March 2025, he said. Reuters Graphics Reuters GraphicsIT services still accounted for 45% of India's total services exports in April-December. EXTERNAL SHIELDThe continued rise in services exports is likely to help rein in India's current account deficit. There is room for further growth with India's share in world commercial services exports currently just at around 4%."

☆ Weak global demand, rate hikes may curtail India growth, economists say
▼ + stars: | 2023-02-28 | by ( Manoj Kumar | ) www.reuters.com time to read: +3 min

The slowdown in growth seen in last quarter of 2022 could continue and erode the 6.4% growth for the fiscal year through March 2024 estimated by the central bank, economists warned, ahead of the release of India's GDP data on Tuesday. The sharp fall in year-on-year growth rate is partly due to a fading of pandemic-induced base effect which had contributed towards higher growth figures in fiscal 2021/22, economists said. He expects the economy to grow at a weaker-than-consensus 4.3% year-on-year in the quarter through December 2022. At least two members of India's six-member monetary policy committee have called for a pause in rate hikes, citing rising global and local risks to growth. The central bank, however, remains focused on above-target inflation as high-frequency indicators suggests that stronger rural demand may help offset weaker urban consumption.

☆ India's FY24 gross borrowing could be less than expected -economists
▼ + stars: | 2023-01-25 | by ( Reuters Staff | ) www.reuters.com time to read: +3 min

MUMBAI (Reuters) - India’s central government’s gross market borrowings for 2023/24 could come in below market expectations as a pool of securities raised to compensate states for a shortfall in goods and services tax may not be rolled over, a few economists said. The government’s gross borrowing is expected to be a record 16 trillion rupees (about $196 billion) for the fiscal year through March 2024, according to a Reuters poll of economists. Once we knock these off, the ‘true’ gross borrowing comes to 15.8 trillion rupees,” the economists estimated. India borrowed 1.1 trillion rupees and 1.59 trillion rupees in 2020-21 and 2021-22, respectively, to lend to states and compensate for a revenue shortfall from tax collections. After adjusting for the redemption of such bonds in 2022-23, IDFC First Bank expects gross borrowing of 15.50 trillion rupees.

REUTERS/Anushree FadnavisJan 24 (Reuters) - India is likely to peg its nominal gross domestic product (GDP) growth at around 11% in the annual budget next week, marking a slowdown from its estimate for the current fiscal year due to the prospect of weak exports, two government officials said. Nominal GDP growth — which includes inflation and is the benchmark used to estimate tax collections — could be pressured by suppressed external demand next year due to a likely U.S. recession, said the sources, who declined to be named as discussions are not yet public. The government expects nominal growth of 15.4% for the current fiscal year that ends on March 31. With nominal GDP of 10.6%-11%, India's gross tax collection growth rate is likely to be around 8% in 2023/24, compared with 14.5% in the current year, due to base effect, said Gaura Sengupta, an economist at IDFC First Bank. The real GDP growth is expected to be pegged at 6.0%-6.5% in the Economic Survey of 2022/23, one of the officials said.

☆ India cenbank to start pilot of digital rupee on Nov 1
▼ + stars: | 2022-10-31 | by ( Reuters Staff | ) www.reuters.com time to read: +1 min

FILE PHOTO: A man walks behind the Reserve Bank of India (RBI) logo inside its headquarters in Mumbai, India, April 8, 2022. REUTERS/Francis MascarenhasBENGALURU (Reuters) - The Reserve Bank of India (RBI) will launch the pilot for a central-bank-backed digital rupee for the wholesale segment on Nov. 1, it said on Monday, identifying nine banks, including top lender State Bank of India, to participate in the project. Settlements in central bank digital currency would reduce transaction costs, the RBI added. Besides SBI, the pilot will include Bank of Baroda, Union Bank of India, HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Yes Bank, IDFC First Bank and HSBC, the RBI said. The central bank’s plans for a currency in digital form comes amid its staunch opposition of cryptocurrencies.

☆ India's banking system liquidity may remain in deficit in second half - analysts
▼ + stars: | 2022-09-22 | by ( Dharamraj Lalit Dhutia | ) www.reuters.com time to read: +4 min

REUTERS/Thomas White/Illustration/File PhotoMUMBAI, Sept 21 (Reuters) - Liquidity in India's banking system is likely to remain in deficit in the second half of this financial year as credit growth picks up and the circulation of currency notes rises, analysts said. As of Tuesday, the systemic deficit stood at 218 billion rupees, its highest since May 2019, with tax outflows in past week also squeezing liquidity. "Unless we see reasonable improvement in the balance of payment deficit, liquidity tightness will continue to persist," said Soumyajit Niyogi, director at India Ratings. Reuters Graphics Reuters GraphicsRBI ACTIONThe U-turn in liquidity has pushed up the overnight inter-bank rate above the policy repo rate of 5.4%. The RBI announced an overnight repo auction for 500 billion rupees after the close of market on Wednesday.

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