Posts Tagged ‘ Emerging Economies ’

Understanding RBI Steps to Arrest Rupee Decline

Saturday, November 16th, 2013

RBI

The RBI Governor had a Media Briefing on last Wednesday. The Governor tried to calm market fears on major two issues. One, the Impact on the Rupee as the Oil Marketing Companies (OMCs) Dollar Demand is back into the market and Second the concern on RBI Policy rates.

The Key takeaways from his briefing are as below:

  • The Governor Expressed satisfaction on the fact that the trade deficit has been quite in control and he estimated current account deficit at USD56 Billion for the current year. This estimate stands USD32 Billion lower than last year and well under 3% of the GDP. The Exports over the last five months have been growing in double digits. Additionally RBI has already raised USD 18 billion through recent initiatives of FCNR (B) and banking capital.

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Inverted Yield Curve and its impact

Sunday, July 28th, 2013

Inverted Yield Curve and its impact

In the last article Understanding the Yield Curve we understood the basics of the yield curve; let’s focus more on the current situation wherein the G-sec yield curve in India has inverted significantly.

Yield Curve is a leading indicator of the economy & a good predictor of future economic activity.

Steep Yield Curve i.e. Positive spread between shorter and longer duration papers is generally followed by period of stronger growth and lower volatility, whereas inverted yield curve, where the yield on shorter duration papers is higher than longer ones, is followed by poor growth and recession.

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