The flow of money up to Q3 2018-19 : credit growth continues to accelerate

The 15% growth in credit on a year over year basis at the end of the December quarter is the highest level seen from the start of financial year 2015-16.

Deposit growth is showing some sign of acceleration. 

Since the start of FY 15-16, average year over year growth in credit and deposits has been 9%, and 11% respectively. So credit growth this quarter really stands out, while deposit growth, although  accelerating, is still weak.

Please see my earlier blogs on this subject under the tab "Banking Industry".

The value of the Rupee: update as of December 2018

Monitoring the Bull Market in Indian Stocks: Update as of December 2018

Please see my blog of July 9, 2014 for the original note on using TMV/GNP ratio to gauge whether the market is cheap or expensive, and my nonthly blogs on this subject.

India Market Map: December 2018

Foreign Exchange

  Stocks 

 Government Bonds

  Gold

  Money Market

 Policy Rates

 Bank Deposits

 Public Provident Fund

  Post Office

 Home Loans 

  Real Estate

The value of the Rupee: update as of November 2018

Please also see last month's blog, and my April 25, 2014 blog titled "Is the Rupee fairly valued?"

RBI should keep the repo rate on hold in tomorrow's MPC statement

CPI Inflation for October fell further to 3.3%, the fourth month of consecutive decline, and for Q2 it has run below RBI's estimate of 4%. Oil prices have falled sharply over the last month. In this scenario, it is likely that the MPC will hold  or even reduce the its H2 inflation forecast of 3.9-4.5%.

Even using the 4.5% number, the real rate, using the one year treasury bill, is in excess of 2.5%. This  is far too high a real rate in this cycle. GDP growth for Q2 has come in at 7.1%, below RBI's estimate of 7.4%. It is now possible that RBI reduces its estimate of GDP growth of 7.4% in the full year 2018-19.

RBI needs to just stay the course and keep the repo rate at 6.5%.

Please see my earlier blogs on Monetary Policy.

The value of the Rupee: update as of October 2018

REER falls to 110 area for the first time since April 2016: Rupee is in somewhat neutral territory.

Please also see last month's blog, and my April 25, 2014 blog titled "Is the Rupee fairly valued?"