Economic Round up _ 13th June 2013

 INR depreciation continued. Touched all time high of 58.98 on 11^th June ( Lost 8 % since 1^st May 13 ) . Due to RBI intervention and positive assurance from Government officials to take steps  to stop further Rupee depreciation INR has started appreciating

CRITICAL POINTS WHY INR DEPRECIATED ARE AS FOLLOWS :-   

§          Fear of    USA Federal reserve discontinuing  Dollar stimulus.  Market over reacting to every US Economic data release.  FII selling Indian Equity   fearing investment  loss due to INR depreciation .  Equity Index at 90 Days low  ( 19000)  FII selling Indian Bond as USA  Bond yield has been improving   Increasing concern of Current Account Deficit  .  Poor Macro Economic  data . Low GDP growth , Inflation concern , High Fiscal deficit , Low Industrial  growth 

                        At this critical time good news from  FITCH rating agency revising India Rating outlook to “STABLE” from “NEGATIVE” will be good support to the Market . Government has also hiked the FII limit of DEBT segment ( Govt Bond ) by USD 5 Billion to USD 30 Billion .  

§           Indust       Industrial growth continued to be very low. April,13  IIP growth at 2% . However Consumer Price inflation (CPI ) fall to 9.31% giving some hope that RBI may cut rate in its review meeting on 17th June  . WPI Inflation to be announced soon expected  to be around 5% in May .    India Forex reserve decrease by USD 4 Billion to  USD288 Billion  , This is mainly due value erosion as USD appreciated against few other Global currency .

§          Globally     Most Currencies are depreciating against USD since 1^st May 2013 , after the fear of QE3 tapering started coming to Market .  South African Rand depreciated by  11% and Australian Dollar by  8% Thai Bhatt  depreciated by 4.74%, Philippines Peso by 4% , Indonesia Rupiahs by 3.60% against USD . The Bond yield ( interest  earning ) in USA & Euro Zone is increasing gradually .  The gap between the yield from Indian Bond and USA Bond has decreased by almost 1% since January 2013 . S&P revises USA Credit  outlook to “STABLE” from “NEGATIVE” which will boost the morale of US Central Bank