สรุปข่าวเศรษฐกิจอินเดียประจำวันที่ 12 มิถุนายน 2556

Prospect of good monsoon lifts economic confidence: Survey

India's economic confidence improved marginally during the month of May on the prospect of good monsoon, says a survey by global research firm Ipsos. In India monsoon is key to determine agricultural output, inflation, consumer spending and overall economic growth. Normal rainfall signals growth and prosperity, as higher farm output would rein in food prices and help the government to take steps to cut the fiscal deficit and farm subsidies. A stronger economic outlook can lift sentiment in equity markets, mainly of companies selling products in rural areas, including consumer goods and automobiles. With 75 per cent of Indians directly or indirectly dependent on agriculture a good monsoon will boost the output of several commodities, reducing the burden on imports.

(Source: The Financial Express)

Rupee weakens to almost 59 a dollar, recovers

The rupee, which on Tuesday fell to almost 59 a dollar, bounced back to close at 58.40 — 26 paise, or 0.44 per cent, weaker than yesterday’s all-time closing low of 58.14 a dollar after, market participants claimed, the Reserve Bank of India (RBI) intervened in the foreign exchange market to sell dollars. According to dealers, the central bank’s move came when the rupee was trading at 58.93 and there was dollar selling from exporters that pulled the rupee back from the day’s low. RBI has been cautious in its intervention due to the depleting foreign exchange reserves, which have come down by $5 billion since the start of the financial year. The rupee has fallen 8.5 per cent during the period and 3.34 per cent this month.

(Source: Business Standard)

No need to further act on gold imports: Arvind Mayaram, Economic Affairs Secretary

The government does not need to act as of now to further moderate gold imports as recent steps have already had considerable impact, economic affairs secretary Arvind Mayaram said on Wednesday in the sidelines of an investor conference. The government has recently raised import duties on gold to 8 percent and the central bank has put curbs on gold financing by banks to put a brake on gold imports, which have been a key reason for India's wide current account deficit. Mayaram also said the government was looking at issuing an overseas bond to raise capital for infrastructure. His comments come after the finance ministry's economic adviser Raghuram Rajan said on Tuesday India was considering raising funds through debt targeted at non-resident Indians.

(Source: The Economic Times)

Steps to attract foreign funds in the offing

In the wake of the rupee hitting a record intra-day low of 58.95 a dollar, the finance ministry today said measures would be announced shortly to encourage portfolio investor inflows. The ministry would also take the proposal for raising foreign direct investment (FDI) ceiling in various sectors to the Cabinet. The government might come out with NRI bonds to attract overseas funds. Gold imports on the first 13 business days till May 20, 2013, averaged $135 million a day. However, in the 14 subsequent days till Friday of last week, the imports averaged only $36 million. The government recently hiked Customs duty on gold to 8 per cent while the RBI has put restrictions on banks to import gold.

(Source: Business Standard)

India's stubborn retail inflation may spoil rate cut hopes

India's consumer inflation likely eased for the third straight month in May but remained high enough to be a headache for the central bank, which is under pressure to cut rates again next week after headline wholesale inflation cooled. India's consumer inflation likely eased to 9.05 percent in May from 9.39 percent in April. Policymakers are also worried that a sharp downward trend in the rupee, which hit a record low of 58.98 to the U.S. dollar on Tuesday, could lead to rise in prices of imported items such as edible oil and build up inflationary expectations in the economy.

(Source: The Financial Express)

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