Target of 60.00 was met. 60.00 is a very crucial level and a sustained and decisive break below 60.00 is needed for rupee to target 57.00. After making a low of 59.59, USDINR was constantly bid up today. We touched 9% on the 10Y benchmark yield and equity benchmarks closed marginally down. 9% yield on 10Y G-Sec does not bode well for the overall economy. With downside risks to CPI inflation, the return on deposits by banks will have to be increased to incentive depositors to put the savings in banks. The growth in aggregate deposits at 11.5 per cent in September 2013 lagged behind the credit growth of 15.10%. With liquidity being tight, deposit growth will have to play catch up for smoother credit off take. Plus if the cost of deposit rises then so does the cost of credit. Higher rates on credit coupled with sticky inflation, will only delay the revival in investment cycle. Announcement of OMOs will support the yields. However, any action is yet to come from RBI. In a scen...
The specific focus of the Blog is on Global and Domestic interest rates and currencies market. I look at fundamentals to define my bias and corroborate that with a study of price action to put on high conviction trades. The views and opinions are those of author and author alone. ~ Author: Vaishali Bagchi