Investment Insights

Suyash Choudhary

In a surprise move, RBI Governor Dr. Urjit Patel resigned from office yesterday citing personal reasons. Needless to say, this comes as a huge surprise not only because of the gravity of the event but also owing to a view that a somewhat cordial way forward had been agreed upon in the last board meeting […]

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Suyash Choudhary

The MPC kept repo rate and stance unchanged as was widely expected, although one member voted for stance to be changed back to neutral. The RBI cut SLR to 18% at the rate of 0.25% per quarter starting January. Key highlights as follows:   On CPI   The market got the cut to CPI forecast […]

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Suyash Choudhary

So It Begins? : A Macro Update

By: Suyash Choudhary

The growth data for the September quarter surprised expectations to the downside. Thus real GVA printed 6.9% versus consensus estimates of 7.3%. Whereas, real GDP came in at 7.1% versus 7.5% expected. As the graph below shows the so-called core GVA, which strips out agriculture and government sectors and is hence considered a proxy for […]

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Suyash Choudhary

Where Do We Go? A Macro Update

By: Suyash Choudhary

Introduction   A lot has changed over the past few months. From a point in September where market was pricing in more than three back to back further rate hikes, the 1 year swap currently at 6.95% is now pricing in about one rate hike; and that too not immediately. To take another example, the […]

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Arvind Subramanian & Khushboo Sharma

Qu’AAA’lity, Qu’AA’lity or Qu’A’lity? – An Update on Credit Markets   The credit default/sharp downgrades faced by IL&FS & its group entities have had a knock-on effect on the credit markets in recent months, thereby resulting in heightened investor concerns regarding select issuers and sectors. This concern and fear among investors has manifested itself in […]

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Sreejith Balasubramanian

Global growth – The case for a Synchronous Slowdown   After the synchronous global growth pick up in 2017, growth in the U.S. continued to accelerate and diverged from that in the EU, Japan and China. This was owing to the one-off fiscal stimulus, which included tax cuts and repatriation benefits to corporates, the impact […]

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Suyash Choudhary

The RBI announced INR 40,000 crores of Open Market Operations (OMO) purchases for November, after having done INR 36,000 crores in October. Prior to this it had done INR 20,000 crores in September, and INR 10,000 crores monthly between May – July. This is largely in line with the two pillars of our core fixed […]

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Suyash Choudhary

The Monetary Policy Committee (MPC) surprised market expectations by keeping policy rates on hold by a vote of 5:1. The member voting for the hike was external member Ghate. Notably, even the most hawkish RBI member, Patra, didn’t vote for a hike. The stance has been changed from ‘neutral’ to ‘calibrated tightening’. Again, the vote […]

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Suyash Choudhary

RBI Announces OMO Calendar

By: Suyash Choudhary

The RBI has announced an indicative (Open Market Operations) OMO calendar for INR 36,000 crores for the month of October. This has been done “on an assessment of the durable liquidity needs going forward and the seasonal growth in currency in circulation observed in build-up to the festive season”. This announcement is consistent with our […]

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Suyash Choudhary

RBI Announces Additional Measure

By: Suyash Choudhary

The RBI has allowed an additional 2% carve out from SLR for the purpose of liquidity coverage ratio (LCR) maintenance, thereby taking the total carve out available to 15% of net demand and time liabilities (NDTL). Further, the RBI has made a proactive statement listing down steps taken thus far on liquidity (two Open Market […]

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