Emkaynomics Fortnightly round up of key banking and economic indicators :PDF link

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Emkaynomics Fortnightly round up of key banking and economic indicators ·      Much along the expected lines, non-food credit growth for the fortnight ended 22nd April’ 12 has eased to 16.9% yoy (18.2% yoy in previous fortnight). With lean credit period and high base, we expect credit growth to remain muted for Q1FY13 ·      After an initial flip, deposit growth too has eased to 13.3% yoy (vs 14.3% in previous fortnight). On a fortnightly basis, overall deposits are down 1%. Growth in term deposit continues to falter at sub-15% levels. Demand deposits account for 10% of total deposit ·      LDR has eased from highs of 78% in Mar’ 12 to 76.5% currently.  With easing credit growth, expect LDR ratio to normalize at 74-75% mark. Inc LDR stood at mere 4.7% ·      Money supply (M3) continues to remain fragile at 13.1% yoy. A lower M3 growth depicts slowing investment / consumption demand. The ratio of M3/M1 has remained at 4.2x+ for a fairly longer period now ·      LAF window continues to remain in deficit mode with net borrowing exceeding Rs1tn for whole of Apr’12. Twin deficit ie soaring fiscal deficit and higher CAD is likely to keep G-sec at elevated levels. 10-yr G-sec has averaged 8.6% since Apr’12 ·      Mar’12 inflation came in at 6.89%, primarily dragged by higher primary food inflation. RBI has targeted WPI inflation at 6.5% for FY13. It has however clearly stated that inflation remain sticky and upside risk to its estimates cannot be eliminated. ·      Call money rates, albeit have eased post policy rate cut, continue to hover at 8%+ levels. Spreads of 10-yr Gsec over 10-yr AAA corporate bonds too has eased to sub-100bps.

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