Investment Insights

Suyash Choudhary

The Monetary Policy Committee (MPC) delivered a unanimous 25 bps rate cut as well a change in stance to accommodative. CPI forecast has been marginally revised upwards for H1 FY 20 to 3 – 3.1% (2.9 – 3% earlier), but is a shade lower for H2 at 3.4 – 3.7% (3.5 – 3.8% earlier). The […]

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Sreejith Balasubramanian

India Monsoon Rainfall: All Eyes on the Skies

By: Sreejith Balasubramanian

The rural agrarian distress in India is now widely acknowledged, as food inflation fell to historical lows and wage growth slowed. With deficient pre-monsoon rainfall and diminishing reservoir levels, the south west monsoon season (June to September) rainfall is back in the spotlight. The season is a crucial driver of rural sentiment and consumption expenditure, […]

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Suyash Choudhary

The elections handing over a continued strong stable government is welcome relief to market participants. In particular, it will help keep India’s country risk premium stable amongst its peers. With this out of the way, local policy can afford to start focusing emphatically on the evolving macro narrative. This is marked by a synchronized global […]

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Sreejith Balasubramanian

PM-KISAN, NYAY and the Indian Economy

By: Sreejith Balasubramanian

  Amidst this season of poll promises, one common scheme announced by both the Bharatiya Janata Party (BJP) and the Indian National Congress (INC) is income support through direct cash transfer. Wrapped in different names, sizes and targets, the broad cost and the operational feasibility of these plans have already been widely debated. We endeavour […]

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Arvind Subramanian

In the aftermath of the IL&FS default in September’18, we have witnessed a steady rise in credit spreads. To recap, the first round of spread expansion was observed in the more liquid AA bonds owing to better price discovery (refer to the previous note Qu’AAA’lity, Qu’AA’lity or Qu’A’lity? – An Update on Credit Markets). This […]

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Suyash Choudhary

The Monetary Policy Committee (MPC) has now delivered a second successive rate cut in the current calendar year. But a bystander only observing the bond and money markets may have been excused in believing that the second cut was actually no cut at all, or indeed maybe even a hike! Thus yields have risen across […]

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Suyash Choudhary

The Monetary Policy Committee (MPC) decided to cut repo rate by 25 bps (4:2 majority) while keeping stance neutral (5:1 majority). The Reserve Bank of India (RBI) has cut both its growth and inflation forecast as well. Prima facie there is nothing to complain in this policy. However, this is somewhat of a disappointment versus […]

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Suyash Choudhary

We had observed in February as to how global policy seemed to be shifting, responding to the synchronized slowdown narrative on global growth (https://www.idfcmf.com/insights/policy-puts-start-re-emerging/). With the European Central Bank (ECB) and US Federal Reserve (Fed) policy meetings since then, these initial ‘put’ options have now been significantly strengthened. Both these central banks ended up sounding […]

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Suyash Choudhary

RBI Expands Liquidity Tools

By: Suyash Choudhary

The RBI has announced a new tool for liquidity creation and decided to inject rupee liquidity for 3 years through long-term foreign exchange Buy/Sell swap. Under this, the RBI will buy up to USD 5 billion from the market via auction on 26th March, and simultaneous sell it back to the same counterparties effective March […]

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Suyash Choudhary

Global Policy Is Shifting, Responding To Slowing Growth   A lot has changed in the world over the past few months. A theme we have focused on is the changing narrative on growth which has gone from a synchronized recovery till late 2017 to significant growth divergences over most of 2018 to a synchronized slowdown […]

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