Emkaynomics -Fortnightly round up of key banking and economic indicators

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Emkaynomics

Fortnightly round up of key banking and economic indicators

n     The growth in non food credit remained stable and strong at 23.2% yoy during the fortnight ended March 11, 2011, while the growth in the deposit mobilization remained moderate at 16.7%.

n     The CD ratio has remained relatively flat at 75% for the week ended March 11, 2011 with TTM CD ratio remaining high at 94.2%. The incr. CD ratio continues to remain near 100%

n     The money supply grew at 17.5%. What we find encouraging is that the difference between growth in M3 and reserve money is now narrowing with the money multiplier at 4.97x

n     Call money rates have inched up to 7.33% as on March 25, 2011. We believe that this is more seasonal phenomenon also with year ending and also large advance tax payments for March 15 installments. Also, the RBI raised the repo rate by 25bps on March 17, 2011

n     The shortage of liquidity in the system increased to Rs838bn for March 18, 2011. Again, we believe that this could be due to the advance tax installment as the repo balances in last week have already come down to Rs676bn and government balances likely were at Rs900bn

n     The spread between the long and short end OIS has remained low at 32bps as opposed to 35bps last fortnight