Bhaskar Dutta

All stories by Bhaskar Dutta

Current account deficit likely to narrow in 2023

Current account deficit likely to narrow in 2023

Rediff.com20 Jan 2023

Lead indicators suggest that domestic current account deficit (CAD) is likely to reduce in 2023, while macro-economic stability has received a boost from inflation being brought back to the official tolerance band, according to the Reserve Bank of India's (RBI's) January 2023 Bulletin. "With the merchandise trade deficit reaching an all-time high of $83.5 billion in a quarter, and a rise in net outgo from the income account, the current account deficit increased to 4.4 per cent of GDP in Q2FY23," the State of the Economy article in the bulletin said. "It is noteworthy, however, that the CAD for Q1 was revised down from 2.8 per cent to 2.2 per cent on account of downward adjustment in Customs data.

SBI's Rs 10,000-crore infrastructure bond sale likely this week

SBI's Rs 10,000-crore infrastructure bond sale likely this week

Rediff.com10 Jan 2023

State Bank of India (SBI) may carry out a planned Rs 10,000 crore sale of infrastructure bonds in the market this week, with the securities likely to be of 15-year maturity, sources told Business Standard. SBI, the country's largest bank, had last week said its board had approved the issuance of infrastructure bonds in the current fiscal year. It, however, had not mentioned the maturity of the bonds or when the sale would take place.

Persistency ratio must improve for life insurance customers: India Inc

Persistency ratio must improve for life insurance customers: India Inc

Rediff.com23 Dec 2022

In order for life insurance customers to attain maximum benefits, it is crucial for the persistency ratio to be far higher than its current level, top executives of the industry said at the Business Standard BFSI Insight Summit on Thursday. The persistency ratio is a metric that measures the number of policyholders who continue paying renewal premium and is gauged at varying stages in the life of a policy. A higher persistency ratio is seen as an indicator of an insurance product that caters satisfactorily to the needs of a customer.

Elections not a factor for monetary policy: RBI Guv

Elections not a factor for monetary policy: RBI Guv

Rediff.com22 Dec 2022

The Lok Sabha elections in 2024 are not a consideration when it comes to monetary policymaking, said Reserve Bank of India governor Shaktikanta Das to underscore the central bank's commitment to controlling inflation. "It's not possible for me to comment what we do in the next MPC (Monetary Policy Committee), but one thing I can tell and I would like to make it very clear-that the fact of elections coming up in 2024 is not a factor at all so far as monetary policymaking is concerned. "Monetary policymaking is for checking (and) controlling inflation," Das said at the Business Standard, BFSI Insight Summit.

Liquidity slips into deficit; RBI cash injections at over one-month high

Liquidity slips into deficit; RBI cash injections at over one-month high

Rediff.com20 Dec 2022

Liquidity in the banking system has slipped into a deficit for the first time in three weeks, prompting banks to borrow the largest quantum of funds from the Reserve Bank of India (RBI) in around a month and a half. The key catalyst for the sudden tightening in liquidity was due to outflows on account of advance tax payments, which occur towards the end of a quarter. Analysts also cited other factors such as a currency leakage and possible interventions by the RBI in the foreign exchange market, which contributed to the tighter liquidity conditions.

RBI may go for another 35 bps rate hike before pause

RBI may go for another 35 bps rate hike before pause

Rediff.com30 Nov 2022

Exactly a fortnight ahead of the Reserve Bank of India's (RBI's) next monetary policy review, a key market indicator of interest rates - the overnight indexed swap (OIS) - suggests that the central bank may tighten policy by 35 basis points and then refrain from further rate hikes. RBI Deputy Governor Michael Patra recently described the OIS as the primary instrument for hedging interest rate risk in India. The six-member Monetary Policy Committee (MPC) of the RBI will meet on December 5-7.

Banks go slow on bond sales as rising interest rates push up costs

Banks go slow on bond sales as rising interest rates push up costs

Rediff.com21 Nov 2022

Banks looking to raise capital via bond sales to fund decade-high credit growth were compelled to put some of these debt issuances on hold amid a sharp rise in yields since late September, sources told Business Standard. A major private lender, Axis Bank, has not yet followed through with a planned issuance of infrastructure bonds worth around Rs 3,000 crore. This is because volatility in the bond market in late September led to investors seeking higher yields, sources said.

Foreign Fund Flows Remain Weak For Banks

Foreign Fund Flows Remain Weak For Banks

Rediff.com3 Oct 2022

Based on the current momentum, the funds likely to be raised through the RBI's relaxed window would be $3.5 billion-$4 billion.

Rupee loses 10% vs USD over a year, FX reserves fall to near 2-yr low

Rupee loses 10% vs USD over a year, FX reserves fall to near 2-yr low

Rediff.com27 Sep 2022

The rupee has depreciated 9.7 per cent against the US dollar over a year and with the RBI stemming the rupee's weakness through dollar sales, its reserves have dropped to their lowest levels since October, 2020. The fall in reserves has widespread implications.

Surplus liquidity slumps to Rs 3K cr on tax outflows, shows RBI data

Surplus liquidity slumps to Rs 3K cr on tax outflows, shows RBI data

Rediff.com20 Sep 2022

Surplus liquidity in the banking system as measured by absorption of excess funds by the Reserve Bank of India (RBI) fell sharply at the end of the last week due to outflows on account of advance tax payments. According to the RBI data, the net liquidity absorbed by the central bank on September 16 was at Rs 3,243.57 crore, much lower than the average of Rs 56,809.92 crore in the preceding four days of the week. The average absorption of funds by the RBI so far in September is at Rs 1.13 trillion, against the average of Rs 1.2 trillion in the previous month, the data showed.

Rupee outperforms most EM peers as dollar surges to a 20-year high

Rupee outperforms most EM peers as dollar surges to a 20-year high

Rediff.com1 Sep 2022

If there was one event that made the month of August stand out, it was a strengthening of the dollar index to levels last seen only 20 years ago, as the Federal Reserve dispelled all doubts about its intention to continue raising interest rates. Predictably, most currencies suffered against the US unit, with the bulk of the losers belonging to the emerging markets pack. Amid the volatility, the rupee, however, has displayed significant resilience and fared much better than most of its peer currencies.

RBI's net forward book shrinks $34.94 bn in Q1 of FY23

RBI's net forward book shrinks $34.94 bn in Q1 of FY23

Rediff.com22 Aug 2022

The Reserve Bank of India's (RBI's) outstanding net forward purchases of US dollars fell by more than 50 per cent from the last quarter of FY22 to $30.86 billion in the June quarter (Q1). The net forwards position was at $65.79 billion at the end of the last fiscal year. The purchases fell by $18.33 billion in June as the central bank intervened in both the forwards and the spot market in order to protect the rupee from excessive depreciation in the face of a widening trade deficit.

Banks flag concerns on rupee, floating rate bonds ahead of RBI policy

Banks flag concerns on rupee, floating rate bonds ahead of RBI policy

Rediff.com26 Jul 2022

At interactions last week with senior officials from the Reserve Bank of India, select banks gave feedback on two key bond market concerns, namely, recent volatility in the rupee-dollar exchange rate and heavy losses incurred on floating rate government bonds due to a demand-supply mismatch, sources told Business Standard. The discussions were held ahead of the RBI's next monetary policy statement, scheduled on August 5. Indian banks are large holders of government securities because of a regulatory mandate to set aside a certain percentage of deposits in sovereign bonds.

Indian corporate houses face a sharp, abrupt increase in funding costs

Indian corporate houses face a sharp, abrupt increase in funding costs

Rediff.com28 Jun 2022

After two years of a record low interest-rate regime, Indian corporate houses are experiencing a sharp and abrupt increase in funding costs. With the Reserve Bank of India last month making an unequivocal turn towards policy tightening amid high inflation, firms looking to tap the capital markets for funds are ending up shelling out more. The yield on the benchmark triple-A-rated corporate bonds maturing in three years has climbed 98 basis points (bps) since the policy rate hike in May. It was last at 7.47 per cent, Bloomberg data showed.

HDFC Bank to shift payments from core banking, ensure minimal downtime

HDFC Bank to shift payments from core banking, ensure minimal downtime

Rediff.com22 Jun 2022

The country's largest private lender HDFC Bank is planning to facilitate a shift in its payments module from the existing core banking platform. This would ensure minimal payments downtime, even if core banking is not available. "This 15-month project will be followed by hollowing the customer-master modules from its existing core systems. "It will ensure a single system of record for customers across various products," said Sashidhar Jagdishan, managing director (MD) & chief executive officer (CEO), in the annual report for 2021-22.

India's forex reserves decline by $4.6 bn as RBI sells dollars

India's forex reserves decline by $4.6 bn as RBI sells dollars

Rediff.com18 Jun 2022

The fall in total reserves was mainly because of a decline in foreign currency assets worth $4.5 billion, the data showed.