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Regional and global markets on Friday chalked up solid gains and volatility measures slumped after the release of forecast-smashing U.S. jobs figures. It looks like the 'sell in May and go away' maxim won't apply this year - investors are bullish and they are buying. Looking ahead, investors in Asia have plenty of economic events and monetary policy decisions to get their teeth into this week. Inflation data from Indonesia, the Philippines, Thailand, Taiwan and China will be released, starting with Indonesia on Monday. Economists polled by Reuters expect annual CPI inflation eased in May to a one-year low of 4.22% from 4.33% in April.

Persons: Jamie McGeever, Diane Craft Organizations: Nikkei, Manufacturing, U.S . State Department, Indonesia, Reuters, Reserve Bank of Australia, Reserve Bank of, Indonesia CPI, Thomson Locations: U.S, Asia, Japan, China, India, Australia, Korea's, Beijing, Indonesia, Philippines, Thailand, Taiwan, Reserve Bank of India, Singapore

☆ India's forex reserves fall for second straight week
▼ + stars: | 2023-06-02 | by ( ) www.reuters.com time to read: +1 min

MUMBAI, June 2 (Reuters) - India's foreign exchange reserves (INFXR=ECI) fell for a second consecutive week and stood at a one-month low of $589.14 billion as of May 26, the Reserve Bank of India's (RBI) data showed on Friday. Reserves had fallen by $6.05 billion in the week ended May 19, the biggest fall in more than three months. Foreign exchange reserves include India's Reserve Tranche position in the International Monetary Fund. The rupee rose 0.1% in the week ended May 26, having traded in a range of 82.5575 to 82.8500. The rupee ended at 82.3050 on Friday to record its best week in five.

Persons: Siddhi Nayak, Savio D'Souza Organizations: Reserve Bank of India's, International Monetary Fund, Siddhi, Thomson Locations: MUMBAI

The government expects growth could remain around 6.5% in the current fiscal year, despite risks emerging from a global slowdown. Asia's third-largest economy expanded faster than the forecast of 5.0% by economists in a Reuters poll in the last quarter of the 2022/23 fiscal year through March, up from a revised 4.5% in the previous quarter. She added growth numbers, however, reflected optimism for the Indian economy despite global headwinds. Reuters GraphicsFederal government spending, constituting about 10% of GDP, rose 2.3% year-on-year in the latest quarter, compared with a revised 0.6% contraction in the previous quarter. Currently, 45% of India's workforce is employed in the farm sector, which contributes just 15% to the economy.

Persons: Anantha Nageswaran, Sakshi Gupta, Narendra Modi, Economists, Sarita Chaganti Singh, Shivangi Acharya, Nishit Navin, Emelia Sithole, David Holmes Organizations: Reserve Bank of India, Reuters, Reuters Graphics Federal, Monitoring, Thomson Locations: DELHI, India, HDFC, Mumbai, New Delhi, Bengaluru

MUMBAI, May 29 (Reuters) - The Reserve Bank of India has come across instances of some banks trying to conceal the real status of their stressed assets while governance gaps have also been noticed at certain lenders, its governor said on Monday. Das also said that despite the guidelines on corporate governance, it was a matter of concern that the RBI has come across gaps in governance at certain banks, which have the potential to cause some volatility in the sector. "While these gaps have been mitigated, it is necessary that boards and the managements do not allow such gaps to creep in," he said. A robust governance structure is the most important requirement to ensure the stability of a bank and sustainable financial performance, Das added. "RBI has engaged with certain banks on the need to make suitable adjustments in their business strategies where it was observed that over-aggressive growth in certain business segments were creating avoidable vulnerabilities," Das said.

☆ Indian rupee poised to weaken after central bank pulls 2,000-rupee notes
▼ + stars: | 2023-05-22 | by ( Nimesh Vora | ) www.reuters.com time to read: +2 min

MUMBAI, May 22 (Reuters) - The Indian rupee is expected to open weaker against the U.S. dollar after the central bank said it will withdraw the highest value currency note from circulation. Non-deliverable forwards indicate rupee will open at around 82.80-82.84 to the dollar, compared to 82.66 in the previous session. On Friday, the Reserve Bank of India said it will withdraw its highest denomination 2,000-rupee note from circulation. "Rupee would come under pressure" alongside the fall in the cost of carry (the forward premiums), Goenka said. "Conducting sell/buy swaps (on USD/INR) would address cash dollar shortage and suck out rupee liquidity and could offer respite."

☆ India's note withdrawal to improve liquidity, ease short-term rates - analysts
▼ + stars: | 2023-05-22 | by ( Siddhi Nayak | ) www.reuters.com time to read: +2 min

MUMBAI, May 22(Reuters) - The Indian central bank's decision to withdraw its highest denomination currency note from circulation is likely to improve banking system liquidity, bringing down recently elevated short term rates, analysts and bankers said. Kotak Institutional Equities estimates that liquidity could improve by around 1 trillion rupees, depending on the behaviour of depositors, while QuantEco Research pegs the potential liquidity impact at 400 billion rupees to 1.1 trillion rupees. ICICI Securities Primary Dealership estimates the liquidity surplus could increase to 1.5-2 trillion rupees. India's banking system liquidity surplus has averaged above 600 billion rupees in May. About 2.5-3 trillion rupees of banking sector liquidity leaks out as currency in circulation each year, wrote Pranjul Bhandari, chief India economist at HSBC.

☆ We expect the Indian rupee to 'top out' in the short term, says Barclays
▼ + stars: | 2023-05-22 | by ( ) www.cnbc.com time to read: 1 min

In this videoShare Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailWe expect the Indian rupee to 'top out' in the short term, says BarclaysAshish Agrawal of the bank says the Reserve Bank of India has turned from buying to selling dollars.

☆ Explainer: What India's decision to scrap its 2000-rupee note means for its economy
▼ + stars: | 2023-05-20 | by ( Ira Dugal | ) www.reuters.com time to read: +3 min

MUMBAI, May 20 (Reuters) - India will withdraw its highest denomination currency note from circulation, the central bank said on Friday. WHY DID THE GOVERNMENT WITHDRAW 2000-RUPEE NOTES? When 2000-rupee notes were introduced in 2016 they were intended to replenish the Indian economy's currency in circulation quickly after demonetisation. However, the central bank has frequently said that it wants to reduce high value notes in circulation and had stopped printing 2000-rupee notes over the past four years. The value of 2000-rupee notes in circulation is 3.62 trillion Indian rupees ($44.27 billion).

☆ India to withdraw 2,000-rupee notes from circulation
▼ + stars: | 2023-05-19 | by ( ) www.reuters.com time to read: +1 min

MUMBAI, May 19 (Reuters) - India will start withdrawing 2,000-rupee ($24.5) notes from circulation, its central bank said on Friday, adding that evidence showed the denomination was not being commonly used for transactions. The 2,000 rupee note was introduced in 2016 after the Narendra Modi-led government abruptly withdrew 500 and 1000 rupee notes to clamp down on forgeries. The government began issuing new 500 rupee notes days later, and added the 2,000 to replenish currency in circulation at a faster pace. However, since then, the central bank has focused on printing notes of 500 rupees and below and has printed no new 2,000-rupee notes in the last four years. "Withdrawal of a currency note is demonetisation and this is a sensible form of demonetisation," said Pronab Sen, economist and former chief statistician of India.

☆ India's forex reserves edge towards $600 billion, hit near 1-year high
▼ + stars: | 2023-05-19 | by ( ) www.reuters.com time to read: +1 min

Changes in forex reserves also stem from valuation gains or losses. For the week to which the forex reserves data pertains, the rupee fell by 0.4%, dragged down by a broader strength in the dollar index. The local unit had traded in a range of 81.6900 to 82.2250. The rupee fell further by 0.6% this week, its worst fall in two months. The local unit ended at 82.66 against the dollar on Friday.

☆ Quantitative tightening: What happens when $2 trillion is sucked out of the global economy
▼ + stars: | 2023-05-19 | by ( Julia Horowitz | ) edition.cnn.com time to read: +7 min

“Quantitative tightening,” or QT, by top central banks will suck $2 trillion in liquidity out of the financial system over the next two years, according to a recent analysis by Fitch Ratings. Investors and banks calibrate their strategies to the amount of money in the financial system, he noted. Then, central banks started withdrawing liquidity from the financial system. Even worse, many banks have large holes on their balance sheets because central banks have simultaneously jacked up interest rates. While government debt levels have skyrocketed in recent years, the cost of servicing that debt has been tamped down by the willingness of central banks to buy large chunks of it.

☆ Indian rupee hits six-week low as weaker yuan dents Asian currencies
▼ + stars: | 2023-05-17 | by ( Sethuraman N R | ) www.reuters.com time to read: +1 min

MUMBAI, May 17 (Reuters) - The Indian rupee hit a more-than-six-week low against the U.S. dollar on Wednesday, in line with the decline in other Asian currencies that tracked the fall in the Chinese yuan after weak economic data. The rupee hit 82.4425 against the U.S. dollar, its lowest since April 3, during the session, before recovering to close up 0.21% at 82.38. The weak economic print from China has weighed on Asian currencies, said Dilip Parmar, research analyst at HDFC Securities. Parmar doesn't expect the Reserve Bank of India to intervene at the current levels as other Asian currencies have started depreciating and the dollar index is strengthening. Domestic economic data points like easing inflation and improved external currencies have mostly come in support of the local currency.

☆ Bullish view on Indian rupee thwarted by wall of cenbank intervention
▼ + stars: | 2023-05-17 | by ( Nimesh Vora | ) www.reuters.com time to read: +3 min

MUMBAI, May 15 (Reuters) - The bullish outlook on the Indian rupee that several foreign banks have is facing a tough test from the Reserve Bank of India's persistent intervention to shore up reserves. Barclays projected the rupee to hit 80 per dollar by next March, while BofA Securities expected a move to 79.5 by then. The rupee currently is down slightly from its March 31 level, at 82.34 to the dollar. There is little doubt that the RBI will persist with its two-way intervention strategy to keep a check on the rupee volatility, chief dealer at another public sector bank said. "Broadly, I agree with what the public sector banks are saying, that RBI reckons the need to continue intervention and build reserves," said Abheek Barua, chief economist at HDFC Bank.

The RBI's repo rate is at 6.50%. Banks met officials from the Fixed Income Money Market and Derivatives Association of India (FIMMDA) last week to raise the issue of persistently high overnight rates. FIMMDA and RBI officials did not respond to Reuters' emails seeking comment. Even as overnight rates stay elevated, treasury officials are not anticipating any infusion from the RBI as they expect liquidity conditions to improve in due course. That dividend transfer, according to traders, could top 1 trillion rupees ($12.23 billion), sharply above the budgeted 480 billion rupees.

☆ Explainer: Why El Nino is a concern for Indian monsoon rains?
▼ + stars: | 2023-05-16 | by ( Rajendra Jadhav | ) www.reuters.com time to read: +4 min

However, a 90% likelihood of an El Nino weather pattern developing during the June-September monsoon season raises the possibility of less than normal rain. WHAT IS EL NINO? As a result, the Indian monsoon tends to be weaker and less reliable during El Nino years. HOW CLOSE IS THE CORRELATION BETWEEN EL NINO AND MONSOON RAIN? The correlation between El Nino and Indian monsoon rainfall is significant, despite occasional instances when India gets normal or above-normal rain during El Nino years.

☆ India's WPI falls for first time in 3 years in April
▼ + stars: | 2023-05-15 | by ( ) www.reuters.com time to read: +1 min

SummarySummary Companies April WPI falls 0.92% on year vs 1.34% rise in MarchApril food WPI up 0.17% vs 2.32% in MarchWPI easing for the last 11 monthsNEW DELHI, May 15 (Reuters) - India's annual wholesale price index (WPI) fell for the first time in nearly three years in April, as prices softened across the board. WPI (INWPI=ECI) fell by 0.92% from the same month a year earlier, having risen 1.34% in March. "High base effect and falling commodity prices will lend downward pressure on WPI inflation this year," said Madan Sabnavis, an economist at Bank of Baroda. WPI has been easing for the last 11 months from the 20-year highs of 16.63% recorded in May 2022. Data released on Friday showed India's annual retail inflation eased to an 18-month low in April, staying well below the Reserve Bank of India's (RBI) upper tolerance limit for the second consecutive month.

☆ India inflation likely hit 18-month low in April - Reuters poll
▼ + stars: | 2023-05-10 | by ( Madhumita Gokhale | ) www.reuters.com time to read: +2 min

Predictions ranged from 4.40% to 5.80%, with respondents expecting inflation to remain below the RBI's 6.00% upper tolerance limit for the second consecutive month. "Food inflation was a mixed bag on the month, with cereals and vegetables easing, whilst pulses and milk rose. "With inflation off the boil besides core (inflation), the RBI is likely to remain on an extended pause." However, inflation was expected to remain well above the RBI's medium-term target of 4.0% in the coming quarters, according to a separate poll. The survey also showed wholesale price inflation (INWPI=ECI), which measures the change in producer prices, is likely to have fallen to -0.20% last month compared to a year ago.

☆ 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.

☆ Russia and India reportedly halt talks over using rupees for trade, with Moscow preferring to be paid in Chinese yuan
▼ + stars: | 2023-05-04 | by ( Carla Mozée | ) www.businessinsider.com time to read: +2 min

Russia and India have suspended negotiations over using rupees for trade, Reuters reported. Russia wants to be paid in Chinese yuan or other currencies, a second Indian government official involved in the discussions told Reuters. India began exploring a rupee settlement mechanism with Russia soon after Moscow launched war against the former Soviet state. No reported deals have been conducted using rupees, Reuters reported. A currency dispute between Russia and India left deliveries of Russian weapons to India on hold, Bloomberg reported last month.

☆ HDFC Bank to open more than 675 branches in semi-urban, rural areas in fiscal year 2024, bank official says
▼ + stars: | 2023-05-04 | by ( Siddhi Nayak | ) www.reuters.com time to read: +1 min

MUMBAI, May 4 (Reuters) - HDFC Bank (HDBK.NS), India's largest private lender, is planning to open more than 675 branches in the semi-urban and rural geographies across the country in 2023-24, a senior bank official said on Thursday. The move is part of the lender's new programme targeting customers in semi-urban and rural areas, helping the bank meet some of its Priority Sector Lending (PSL) targets. PSL requirements, which include lending to weaker segments of the economy, are linked to an organisation's loan book. Of this, around 52% of the bank's branches are in the semi-urban and rural areas. Going forward, HDFC Bank aims to double business in semi-urban and rural areas - both by assets and liabilities - in the next two-to-three years, Vohra said.

☆ India's HDFC beats Q4 profit estimates on home loan demand
▼ + stars: | 2023-05-04 | by ( ) www.reuters.com time to read: +2 min

HDFC said profit after tax rose to 44.26 billion rupees ($541.09 million) for the three months ended March 31, from 37 billion rupees a year earlier. Analysts, on average, had expected profit after tax of 38.86 billion rupees, according to Refinitiv IBES data. The lender said it provided individual loans worth 93.40 billion rupees during the quarter, compared with 83.67 billion rupees a year earlier. HDFC is on track to merge with India's largest private lender HDFC Bank Ltd (HDBK.NS). The RBI in April allowed HDFC and HDFC Bank selective regulatory relief in order to smooth out the merger between the two entities.

☆ Indian rupee headed higher on weak dollar, fall in US yields; Fed awaited
▼ + stars: | 2023-05-03 | by ( Nimesh Vora | ) www.reuters.com time to read: +2 min

MUMBAI, May 3 (Reuters) - Indian rupee is expected to open higher on Wednesday, boosted by a broad decline on the U.S. dollar and plunge in yields amid worries over the U.S. banking sector. Non-deliverable forwards indicate the rupee will open at around 81.76-81.80 to the dollar compared to 81.88 in the previous session. The rupee reached 81.7225 on Tuesday, before dollar bids by public sector banks, probably for the Reserve Bank of India, prompted it to reverse course. The U.S. Federal Reserve will most likely raise rates by 25 basis points later in the day, interest rate futures indicate. Investors will be eyeing the U.S. central bank's forward guidance to assess the path ahead for interest rates.

☆ India April factory activity hits 4-month high on robust demand
▼ + stars: | 2023-05-01 | by ( Anant Chandak | ) www.reuters.com time to read: +2 min

BENGALURU, May 1 (Reuters) - India's factory activity expanded at its quickest pace in four months in April, driven by solid growth in new orders and output, a private survey showed on Monday, signaling resilient demand and an encouraging outlook. The survey results suggest India will continue to be one of the fastest-growing major economies despite slowing global growth that has undermined momentum across several other countries. "Reflecting a robust and quicker expansion in new orders, production growth took another step forward in April. Besides seeing the strongest inflow of new work in 2023 so far, capacities were expanded through job creation, input buying was lifted." Foreign demand also expanded at the fastest pace in four months in April and optimism improved.

☆ India's Kotak Mahindra Bank beats expectations with 26% net profit rise in Jan-March
▼ + stars: | 2023-04-29 | by ( ) www.reuters.com time to read: +2 min

MUMBAI, April 29(Reuters) - India's Kotak Mahindra Bank (KTKM.NS) on Saturday reported a better-than-expected 26% increase in net profit for the January-March quarter, helped by higher net interest income and strong loan growth. The private lender's standalone net profit, excluding subsidiaries, rose to 34.96 billion rupees ($427.8 million) in the fourth quarter of the fiscal year from 27.67 billion rupees in the same period last year. The result beat analysts' forecast of 29.13 billion rupees, according to Refinitiv data. Net interest income - the difference between interest earned and interest expended - increased 35% to 61.03 billion rupees from 45.21 billion rupees a year ago. Thanks to strong credit growth, large private banks such as HDFC Bank and ICICI Bank reported a double-digit profit growth for the Jan-March quarter.

☆ Asia's richest banker will loom over his successor
▼ + stars: | 2023-04-25 | by ( Shritama Bose | ) www.reuters.com time to read: +3 min

It will also be messy and is at odds with the regulator’s own aim to improve governance across the industry. Bosses of the country’s private-sector banks are allowed to stay in their jobs for up to 15 years. It is little surprise that more than 99% of investors voted for him to stay, per exchange filings published last week. If Kotak sits on the board, his successor - expected to be an insider – will effectively continue to work with his or her long-time boss. If things go wrong at Kotak, regulators may end up wondering who to blame.

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