Fortnightly round up of key banking and economic indicators n Emkay

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Fortnightly round up of key banking and economic indicators

n     Growth in non food credit came in upwards of 20% yoy for second consecutive fortnight. We expect growth to remain buoyant on back of festive season

n     However, has higher base-effect of previous year and elevated interest rate hurt growth, we expect credit growth to taper-off to sub-20% level by end-FY12

n     Growth in deposits continues to remain steady at ~18.0% yoy levels (up 6% YTD). While CD ratio remains in narrow range of 73-75% since Mar’11; incremental CDR has been on an up-move (43%) 

n     Growth in money supply eases further to 16.4% yoy levels; reserve money growth too moderated to 13.8% yoy levels. Money multiplier came in at 4.98x

n     Net borrowing under LAF window post advance tax-outflows came in at ~Rs1tn. The liquidity situation is likely to remain tight owing to improving credit demand

n     The spread of 10-yr Gsec over 1-yr Gsec has moved into negative territory (5-10bps). These levels were last witnessed in July-October’2008 period

n     After a brief period of sub-8% mark, Call money rates have spiked to 8.25%. The spread between the long and short end OIS has moved into negative terrain