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☆ Indian rupee's worst behind it; inflows crucial in 2023 - analysts
▼ + stars: | 2022-12-30 | by ( Anushka Trivedi | ) www.reuters.com time to read: +2 min

MUMBAI, Dec 30 (Reuters) - The Indian rupee is likely to hold in a tight range in the early part of 2023 but the worst is possibly behind it, said traders and analysts. Plus, an easing of commodity prices could help our trade deficit," he added. And while global commodity prices and the U.S. dollar retreated in the last quarter of 2022, the rupee failed to capitalise on it. The rupee is set to end the year down nearly 11% against the greenback, its worst annual performance since 2013. How the flows play out will be crucial to the rupee's fortunes in 2023.

☆ India's forex reserves slip for second week
▼ + stars: | 2022-12-30 | by ( ) www.reuters.com time to read: +1 min

MUMBAI, Dec 30 (Reuters) - India's foreign exchange reserves (INFXR=ECI) fell to $562.81 billion in the week through Dec. 23, the Reserve Bank of India's (RBI) statistical supplement showed on Friday. For the week ended Dec. 16, the country's reserves were at $563.50 billion. The rupee has been calmer over the past couple of weeks, trading on the weaker side of 82.50 in a narrow range for the week ended Dec. 23. Traders have said state-run banks were likely offering dollars on behalf of the RBI to keep the rupee from breaching 83 per dollar. For the current week, rupee traded in an even tighter range in thin volumes and ended at 82.72 on Friday.

Indian companies raised around 5.38 trillion rupees ($64.95 billion) through private placements in 2022, largely aided by the banking system's massive cash surplus, data showed. Public issues were only to the tune of around 80 billion rupees. Indian companies raised 127.1 billion rupees and 175.3 billion rupees through public issues in 2020 and 2021 respectively, SEBI data showed. Fundraising through private placement stood at 8 trillion rupees and 6.31 trillion rupees respectively. "I think public issues are rising because the repricing of bank fixed deposits was very gradual, while public issues are realigning to market realities much faster," said Sudhir Agrawal, executive vice president and fixed income fund manager at UTI Mutual Fund.

☆ India's current account gap widens to 9-year high
▼ + stars: | 2022-12-29 | by ( Swati Bhat | ) www.reuters.com time to read: +2 min

MUMBAI, Dec 29 (Reuters) - India's current account deficit widened in the July-September quarter as high commodity prices and a weak rupee increased the country's trade gap, data from the Reserve Bank of India (RBI) showed on Thursday. In absolute terms, the current account deficit (CAD) (INCURA=ECI) was $36.40 billion in the second quarter of fiscal year 2022/23, its highest in more than a decade. The median forecast of 18 economists in a Dec. 5-14 Reuters poll was for a $35.5 billion CAD in the July-September quarter. The RBI said services exports reported growth of 30.2% on a year-on-year (y-o-y) basis, driven by exports of software, business and travel services, while net services receipts increased sequentially and y-o-y. "Slowing global growth entails both merchandise as well as services exports will remain muted," she said.

☆ Indian banks may need to lift deposit rates as credit demand surges - RBI report
▼ + stars: | 2022-12-27 | by ( Siddhi Nayak | ) www.reuters.com time to read: +3 min

While banks have swiftly transmitted the hikes to their lending rates, deposit rates have been laggards for most. To fund this credit growth, banks are mobilising deposits at a faster pace amid tight banking system liquidity in recent weeks. The transmission repo rate increase during May-October to deposit rates is likely to provide a "fillip" to deposit growth rates, the report said. The RBI said it was imperative that banks ensure due diligence and robust credit appraisal to limit credit risk. "The uncertainties characterising fast-changing macroeconomic scenario amidst formidable global headwinds during 2022-23 can pose new challenges to the banking sector," the RBI said.

☆ India's forex reserves snap 5-week rise
▼ + stars: | 2022-12-23 | by ( ) www.reuters.com time to read: +1 min

MUMBAI, Dec 23 (Reuters) - India's foreign exchange reserves (INFXR=ECI) snapped a five-week rising streak and fell to $563.5 billion in the week through Dec. 16, the Reserve Bank of India's (RBI) statistical supplement showed on Friday. For the week ended Dec. 9, the country's reserves were at $564.07 billion. In the week to Dec. 16, the Indian unit fell 0.7% and traded in a 82.3975 to 82.8900 range. The RBI had wound down much of its forward dollar holdings by the end of October, according to data released in the central bank's monthly bulletin. The RBI said its net forward dollar holdings stood at $241 million at the end of October, compared with $10.42 billion as of end-September and $65.79 billion as of March-end.

☆ INDIA RUPEE Rupee may open slightly lower, risks falling below key support
▼ + stars: | 2022-12-22 | by ( Nimesh Vora | ) www.reuters.com time to read: +2 min

MUMBAI, Dec 22 (Reuters) - The Indian rupee is likely to open marginally lower against the U.S. currency on Thursday, weighed by persistent dollar demand from importers and rise in oil prices. The rupee is expected to be around 82.85-82.88 at open, compared with 82.81 in the previous session. It looks like it will be another session where help will be needed to prevent the rupee from falling below 83, a trader at a Mumbai-based private bank said. Public sector banks have been regularly selling dollars lately, when rupee falls near to 82.85-82.90 levels. Asian currencies were mostly higher, while the dollar index was down to 103.98 on the back of the positive.

☆ Cryptocurrencies could cause the next financial crisis, Indian central bank head warns
▼ + stars: | 2022-12-21 | by ( Arjun Kharpal | ) www.cnbc.com time to read: +3 min

Shaktikanta Das, governor of the Reserve Bank of India (RBI), called for private cryptocurrencies to be "prohibited." The next financial crisis will be caused by private cryptocurrencies, if these assets are allowed to grow, the head of India's central bank warned on Wednesday. Das' comments come as the central bank pushes to introduce its own digital version of the Indian rupee. The digital rupee is a type of central bank digital currency (CBDC). China's central bank is furthest ahead globally on the development of a CBDC.

LONDON, Dec 20 (Reuters) - India has been one of the strongest sources of global energy consumption growth in 2022 as the country's economy rebounded from the disruption and lockdowns caused by the coronavirus pandemic in 2020 and 2021. Generation has rebounded so fast it is now less than 1.5% below the pre-pandemic trend for 2015-2019, based on data from India's Central Electricity Authority. Chartbook: India energy consumptionManufacturing production has been gradually declining since the second quarter, based on estimates published by the Reserve Bank of India. As the country's external environment becomes increasingly adverse, energy consumption is likely to grow much more slowly in 2023. Related columns:- India's electricity shortage erased by renewables growth(Reuters, Nov. 25)- Dollar shock threatens global economy (Reuters, Sept. 29)- India's coal and electricity supplies are more comfortable this autumn (Reuters, Sept. 28)- John Kemp is a Reuters market analyst.

☆ India plans tax waivers for IDBI Bank buyer - sources
▼ + stars: | 2022-12-20 | by ( Nikunj Rajesh Ohri | ) www.reuters.com time to read: +2 min

The federal finance ministry is looking to relax a tax clause, which would require the buyer of IDBI Bank to pay additional tax if the share price rises post the final bid, one of the officials said. In case the share prices of IDBI Bank increase after financial bids are formally placed, the difference in share price may be considered as "other income" for the buyer as per tax laws, explained Om Rajpurohit, a partner at tax firm AMRG & Associates. The government and state-run Life Insurance Corp. (LIC) (LIFI.NS) together hold about 95% in IDBI Bank, and have sought initial bids from investors to buy a 60.72% in the bank. Last week, it extended the deadline for submitting initial bids until Jan. 7. Once the government receives initial bids expressing interest from buyers, the Reserve Bank of India would vet them to see if they meet the central bank's "fit and proper" criteria.

Dec 16 (Reuters) - India's rupee trade settlement mechanism, a means of using rupees instead of dollars and other big currencies for international transactions, is attracting interest from more countries. The four countries have shown interest in opening special rupee accounts, called vostro accounts, but partner banks in India have not yet provided those facilities, documents showed. Mauritius and Sri Lanka have also shown interest, and have seen their special vostro accounts approved by the RBI, documents showed. Details of potential rupee-dirham trade mechanism are being firmed up by the central banks of India and UAE, a second government official said, requesting anonymity. Talks with Saudi Arabia on a rupee-riyal trade mechanism also continue, the government official added.

Summary Data due at 1200 GMT Dec. 12BENGALURU, Dec 9 (Reuters) - India consumer price inflation likely cooled to a nine-month low of 6.40% in November mainly due to a moderation in food prices, according to a Reuters poll of economists. Food prices alone account for nearly 40% of the consumer price index (CPI) basket in Asia's third largest economy. The Dec. 5-8 Reuters poll of 45 economists predicted the second consecutive decline in inflation (INCPIY=ECI) to an annual 6.40% from 6.77% in October. The central bank maintained its inflation forecast for financial year 2022/23 at 6.7%, the same as a recent Reuters poll. Furthermore, there are upside risks to food inflation particularly from cereals."

☆ India’s Outlook Is Surprisingly Bright
▼ + stars: | 2022-12-08 | by ( Megha Mandavia | ) www.wsj.com time to read: 1 min

The Reserve Bank of India has leeway to rein in inflation. India’s central bank has further tightening to do, but the economy looks as though it can handle it. Stock investors, too, should consider taking a look: The South Asian country is well placed to handle a global slowdown next year, as long as rebounding global oil prices don’t play the spoiler.

☆ INDIA RUPEE Rupee eyes stronger opening on subdued dollar, oil prices
▼ + stars: | 2022-12-08 | by ( Anushka Trivedi | ) www.reuters.com time to read: +2 min

MUMBAI, Dec 8 (Reuters) - The Indian rupee was expected to open slightly stronger against the U.S. currency on Thursday, amid weaker oil prices and as the dollar dropped overnight on growth concerns in the world's top economy. The partially convertible rupee was seen around 82.30-82.35 per dollar in the opening trades, compared to its previous close of 82.47. Monitoring debt and equity inflows will be key, but the rupee could head towards 82.50-levels, the trader added. Several executives at top U.S. banks this week have warned about this possibility. Meanwhile, the Reserve Bank of India hiked the key repo rate by 35 basis points (bps) to 6.25% on Wednesday but sounded more hawkish than market expectations about fighting inflation.

☆ India cenbank hikes key policy rate by 35 basis points
▼ + stars: | 2022-12-07 | by ( ) www.reuters.com time to read: +7 min

However, the pace of rate hikes is reducing from 50 bps to 35 bps, in line with expected global hikes." The market needs to keep a close watch on global rate hikes and sticky core inflation." "We expect RBI to go for another 25 bps hike in its next policy, with the terminal rate at 6.5%. ANUJ PURI, CHAIRMAN, ANAROCK GROUP, MUMBAI"The 35 bps rate hike by the RBI - the fifth consecutive rate hike this year - comes as no surprise. We see a possibility of another 25 bps rate hike before a prolonged pause."

☆ Indian shares unchanged ahead of RBI policy decision
▼ + stars: | 2022-12-07 | by ( ) www.reuters.com time to read: +2 min

BENGALURU, Dec 7 (Reuters) - Indian shares had a muted open on Wednesday, ahead of a widely expected interest rate hike by the Reserve Bank of India, though investors will focus on the outlook the central bank provides on its fight against domestic inflation. The RBI is widely expected to raise rates by a smaller 35 basis points (bps), after three back-to-back 50-bps moves to tame stubbornly high inflation. The Nifty and Sensex have climbed 9% each since the last RBI rate hike on September 30. The sustainability of the drop in crude prices is also uncertain. "A likely smaller rate hike will signal a mix of cautiousness and comfort while keeping all options open for the February policy depending on the conditions," Suvodeep Rakshit, chief economist at Kotak Instituitonal Equities, wrote in a pre-monetary policy note.

The monetary policy committee (MPC), comprising three members from the RBI and three external members, raised the key lending rate or the repo rate (INREPO=ECI) to 6.25% in a majority decision. "The MPC was of the view that further calibrated monetary policy action was warranted to keep inflation expectations anchored, break core inflation persistence and contain second round effects,” Das said as he announced the monetary policy committee's decision. We see a possibility of another 25 bps rate hike before a prolonged pause," Upasna Bhardwaj, chief economist at Kotak Mahindra Bank said. A 6.8% growth (rate) is robust," Das said. The Indian rupee dipped against the dollar after the policy decision and comments on inflation, while government bond yields rose.

☆ India cenbank says digital currency transactions to stay largely anonymous
▼ + stars: | 2022-12-07 | by ( Nupur Anand | ) www.reuters.com time to read: +2 min

India started the pilot project for its digital currency, or e-rupee, from Nov 1, when it was opened for initial trial. Then only being used by banks for settlements with each other, the scope of the project was expanded to include consumers and retailers-led transactions from Dec. 1. "E-rupee is money, UPI is a payment method," RBI's Sankar said. "Digital currency is like payment of cash, it is possible that two private entities can provide wallet features and money can move in between them. That is not possible with UPI which has to be from one bank to the other," he said, adding that e-rupee provides privacy unlike UPI.

☆ India's c.bank set to raise rates; outlook on growth, inflation in focus
▼ + stars: | 2022-12-07 | by ( Swati Bhat | ) www.reuters.com time to read: +3 min

Reuters Graphics Reuters GraphicsThe central bank's outlook, which will accompany the rates decision, will be an important pointer to future policy moves, economists said. Global crude oil prices have been falling in recent months but has yet to be reflected in domestic prices. Sabnavis, who does not see the RBI reducing its inflation forecast, pointed out that though global oil prices have come down, the government has not relaxed duties or taxes. "Hence, the consumer is still paying the same price and has not derived any benefit from declining oil prices." Lower oil prices may also be countered by higher than expected food prices.

Australia's central bank raised interest rates by a quarter percentage point to a 10-year high on Tuesday as expected, and said more tightening was needed. Australian stocks slumped 2.5% and the MSCI Asia ex-Japan stock index fell 1.2%, its biggest fall in over two weeks. Some days, investors look at sluggish activity through the 'bad news is good news' lens, betting that weak data will prevent central banks from raising rates too much. Other days, bad news is just bad news and Tuesday was one of them - bonds surged and oil slumped to its lowest since the first week of the year. Will bad news be bad news and good news be good news, or bad news be good news and good news be bad news?

☆ Mukesh Ambani will take credit where it’s due
▼ + stars: | 2022-12-06 | by ( Shritama Bose | ) www.reuters.com time to read: +5 min

Boss Mukesh Ambani might do precisely that to fund a push by his $220 billion Reliance Industries (RELI.NS) conglomerate into consumer lending. The company is spinning off and listing its little-noticed non-bank financial company. More than rivals, Ambani is sitting on a treasure trove of data to assess the credit worthiness of borrowers. As a home-grown tycoon, Ambani has a better chance of success than other late entrants to financial services. On Oct. 21, Reliance revealed plans to spin off Reliance Strategic and rename it Jio Financial Services.

☆ INDIA RUPEE Rupee below 82/USD for first time in a month, premiums at 12-yr low
▼ + stars: | 2022-12-06 | by ( Nimesh Vora | ) www.reuters.com time to read: +1 min

The rupee was at 82.2550 to the dollar at 10:58 a.m. IST, down from 81.79 in the previous session. The local unit dropped to a low of 82.34, a level last seen on Nov. 4. Talk of a mining company's large dividend payment-related dollar outflow was adding to the USD/INR upside momentum, they added. Meanwhile, USD/INR forward premiums fell more to slip to their lowest level in more than a decade. The RBI will raise interest rates by a smaller 35 basis points to 6.25%, according to economists polled by Reuters.

☆ World Bank sees India's growth at 6.9% this year
▼ + stars: | 2022-12-06 | by ( ) www.reuters.com time to read: +1 min

REUTERS/Rupak De Chowdhuri/FilesNEW DELHI, Dec 6 (Reuters) - India's economy is expected to grow 6.9% in the current fiscal year, the World Bank said on Tuesday, adding that it is well positioned to tackle global headwinds. The World Bank raised its forecast for India's growth to 6.9% for the current fiscal year from 6.5% earlier. However, the World Bank is confident that the global slowdown has a much lower impact on India, compared to other emerging economies. "We have no concerns about India's debt sustainability at this stage," World Bank economist Dhruv Sharma said, adding that public debt had declined. The report sees average retail inflation at 7.1% this year and warns that the fall in commodity prices could dampen inflationary pressures.

☆ INDIA RUPEE Rupee likely to fall after robust U.S. data sparks rate hike fears
▼ + stars: | 2022-12-06 | by ( Nimesh Vora | ) www.reuters.com time to read: +2 min

MUMBAI, Dec 6 (Reuters) - The Indian rupee is expected to open lower versus the dollar on Tuesday after better-than-expected U.S. data rekindled worries on how high the Federal Reserve will hike rates. The rupee is projected to open at around 81.90 per U.S. dollar, weaker than the 81.79 closing in the previous session. The rupee has in the last two sessions declined despite a host of positive cues. The rise in Treasury yields and expectations that the Reserve Bank of India will deliver a smaller rate hike on Wednesday may push rupee forward premiums to new multi-year lows. The RBI will raise interest rates by a smaller 35 basis points to 6.25% in December, according to economists polled by Reuters.

The findings highlight how the housing market, one of the biggest employers in a country of around 1.4 billion people, is likely to remain a stable contributor to growth in Asia's third-largest economy going forward. Relatively modest interest rate risk partly explains why all but one of 10 analysts who answered an additional question said the chances of a significant slowdown in the housing market over the coming year were low. Nine of 11 respondents said either an economic slowdown or rising rates would be the biggest challenge for first-time homebuyers. "While India ... has been quite resilient amidst global disturbances, the chances of a slowdown in India cannot be ruled out," said Anuj Puri, chairman of ANAROCK Property Consultants. (For other stories from the Reuters quarterly housing market polls:)Reporting by Milounee Purohit and Indradip Ghosh in Bengaluru Polling by Maneesh Kumar Editing by Hari Kishan, Ross Finley and Matthew LewisOur Standards: The Thomson Reuters Trust Principles.

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