Monthly statistical e-bulletin comprising a Quick Review of the Economy and about 30 tables and some charts with the latest available economic/financial market indicators, both Indian and Global.
2. E-UpDates April 2018
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A Quick Review of the Economy
Global growth indicators remained strong in the first quarter of 2018 after a 3% (qoq, saar) rise in
output in the final quarter of 2017. The JP Morgan Global Composite PMI stood at 53.3 in March, after
reaching 54.8 in February, the highest since mid-2014. Though unemployment rates in many
countries are seeing lows not seen for a decade or more, the rise in inflation remains incipient
providing leg-room for orderley winding down of easy money policies. Global oil prices,which had
climbed down by 5% (mom) in February on higher inventories,rose again in late March on fears of
sanctions agaist Iran.
The US economy continued to gain; tax cuts boosted personal disposable incomes taking the savings
rate to 3.2% in January from a decade-long low of 2.5%. The labour market added 313,000 jobs in
February as compared to an average of 200,000 since 2011. The new Fed Chaiperson increased the
policy rate by 25bps on 21st March. The Euro area has also maintained more or less robust growth in
early 2018. Recent euro-area data have disappointed however, with gauges for economic activity and
retail sales missing estimates and investor confidence slipping. The slide has been particularly
pronounced in Germany, the region’s largest economy, where exports and industrial output both saw
a sharp drop in February. The trend continued with French manufacturing and Italian industrial
production both posting unexpected declines. Fiscal positions of some members of the euro area were
still “sub-optimal” despite the window of opportunity provided by the ECB’s still-accommodative
policy to improve their positions and implement structural reforms. Japan’s recent indicatrs suggest
steady improvement after a 1.7% growth in 2017. Japan's unemployment rate increased in February,
but still at its lowest level since April 1993. China’s inflation numbers indicate slowing growth in
2018. Producer price inflation continued to cool in March, slowing to a 17-month low, and softening
for five months in a row, supporting the view that a slowdown in the world's second largest economy
is inevitable, weighed down by the cooling property market and rising borrowing costs. Consumer
inflation also eased in the previous month as the effects of booming demand spurred by the Lunar
New Year holiday in February receded, The President promised to open the country's economy
further and lower import tariffs on products like cars, in a speech seen as an attempt to defuse the
increasingly bitter dispute with the US. China will allow foreign firms to compete on an equal footing
with domestic companies in the financial sector by year-end.
Global financial markets, after recoveringfrom a bout of turbulence in February, faced renewd
volatility in late March, arising from fears of increasing protectionism. The better news for investors
comes after words from both Beijing and Washington in the latest signs of a climbdown from the
brink of a potentially damaging trade war. While the Chinese president promised economic reforms
and lower import tariffs, soothing fears over the country’s simmering trade standoff with the US, the
US president tweeted confirmation that the US could rejoin the Pacific Rim pact (TPP) if offered a
better deal. A gauge of global equity price movements, the MSCI All Country World equity index
reached a High of 529.77 and a Low of 498.72 in March.
India's IIP sustained the growth momentum and acceleratedto 7.5% in January, on the back of strong
manufacturingcoupled with higher off take of consumer and capital goods. Manufacturing output
rose 8.7%, Electricity generation rose 7.6%, while Infrastructure and construction goods’ output grew
6.8%. Mining output rose just 0.1%, as compared with an 8.6% rise in the same month, last year. The
use-based classification showed that production of primary goods rose 5.8%, while Capital goods, a
barometerof investments, showed a sharp increase in output by 14.6% in January, 2018 as against a
decline of 0.6% year ago. Consumer non-durable goods, which are mainly fast moving consumer
goods, too showed an increase of 10.5% as against a growth of 9.6%. Consumer durable goods
recorded a growth rate of 8% in January 2018 against a contractionof 2% a year ago. As 16 of the 23
industry groups in the manufacturing sector showed growth, the industrial sector which registered
the highest positive growth, was other transport equipment at 33.1%, followed by 27.8% growth in
furniture and 26.6% in motor vehicles, trailers and semi-trailers.Cumulative IIP growth for the
period of April-January over the corresponding period of the previous year stands at 4.1%, as
compared to 5% in same period in previous financial year.
The Index of Eight Core Industries, which represent the output of major sectors like coal, steel,
cement and electricity,rose by 5.3% in February compared with an increase of 6.1% in January and
0.6% in the correspondingmonth of 2017.
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WPI inflation eased to 2.48% in February, dipping for the third straight month after touching an eight-month high in
November,helped by a softer rise in food and fuel prices. The rate of inflation based on WPI Food Index consisting of ‘Food
Articles’ from Primary Articles group and ‘Food Product’ from Manufactured Products group decreased from 1.65% in
January to 0.07% in February. From a year earlier, the prices of pulses have fallen by nearly 25% and of sugar by almost 10%.
However,vegetables prices in February were up 15.3% from a year ago period. The index for Primary Food Articles group
declined by 2% to 137.8 from 140.6 for the previous month due to lower price of fruits & vegetables (9%), gram, tea and
masur (4% each), rajma and bajra (3% each), egg, fish-marine, peas and urad (2% each) and wheat (1%). However, the price
of arhar, maize, condiments & spices, coffee, moong, fish-inland, poultry chicken and paddy (1% each) moved up. The index
for Fuel & Power rose by 1.2% to 98.1 from 96.9 for the previous month. The index for ‘Mineral Oils’ group rose by 1.8% to
89.8 from 88.2 for the previous month due to higher price of ATF (7%), kerosene and lube oils (4% each), furnace oil (3%),
HSD and petrol (2% each) and petroleum coke (1%). The index for Manufactured Products rose by 0.4% to 115.2 from 114.7
for the previous month.
CPI based inflation eased to a four-month low of 4.44% in February as food prices softened. Among the CPI components,
inflation of food and beverages dipped to 3.38% in February from 4.58% in January Inflation in vegetables was 17.57%, down
from 26.97% in January, and for fruits it was 4.80% (as against 6.24%). Milk and its products too were less expensive with
inflation print of 4.21%, cereals and products at 2.10%, meat & fish at 3.31% while for eggs the prices grew at a slower pace
of 8.51%. Inflation for the fuel and light category was at 6.80% in February (against 7.73% in January). However, the rate of
price increase was higher for transport and communication services at 2.39% (1.97% January). A hike in import taxes last
month across agri-commodities such as oilseeds, pulses and wheat could impact domestic food inflation. The inflation for
housing increased to 8.28%, while that for transport and communication2.39% and health 4.95%, while it has eased for
personal care and effects to 4.24%, education 4.05%, household goods and services 4.16%. The inflation for clothing and
footwear increased to 5.00%.
India's fiscal deficit will be narrower than the revised budget estimate of 3.5% of GDP in 2017-18; the fiscal deficit target was
revised upwards to 3.5% of GDP or Rs. 5.94 trillion from 3.2% or Rs. 5.46 trillion. Buoyant direct tax collections and record
divestment proceeds exceeding Rs. 1 trillion have helped the government in meeting its fiscal deficit. Direct tax collections in
FY18 are estimated at Rs. 9.95 trillion. While growth in corporate tax collections was 17%, it was 19% for personal income
tax. India reported a fiscal deficit of 7.2 trillion rupees ($110.42 billion) for April-February, which was 120.3 % of the
budgeted target for the current fiscal year. Buoyancy in the stock markets, with high trading turnover, particularly in the
derivatives segment, has helped the government collect a record amount from the securities transaction tax (STT) in 2017-18.
The STT collection for the fiscal year stood at Rs. 111.23 billion, an increase of 24% over 2016-17. The amount is also 43%
higher than the Revised Estimates of Rs. 77.7 billion. The government fixed its borrowing target for the first half of the next
fiscal (April-September period of 2018-19) to Rs 2.88 trillion. The amount is 48% of the government's budgeted amount for
the full fiscal year, much lower than the Rs 3.72 trillion it had borrowed in the first half of 2017-18, in a bid to calm volatile
markets.
Overnight CMRs mostly remained within the bounds of the policy rate corridor in March, however, moving closer to the upper
bound since mid-month and shooting up by 10 bps on the 31st, on account of advance tax outflows and FY closing. Overnight
rates traded mostly in alignment with the CMR. With the net G-sec borrowing for FY2018-19 target lowered, bond yields
softened somewhat. However, the volatility in global financial markets was reflected in the irregular movements in secondary
market yields. Constant maturity yields (CMYs) at the shortest end of the maturity spectrum fell —3-month CMY by 15 bps
and the 1-year by 10 bps. YTMS for 2- to5-year residual maturities firmed marginally—3-year by 8 bps and the 5-year by 4
bps. The 10 and 20-year CMYs softened by 2 bps, while CMYs of the in between residual maturity groups firmed by 2 bps. In
the First Bi-monthly Monetary Policy Statement for 2018-19, in early April, the RBI held the policy repo rate under the LAF at
6%. Consequently, the reverse repo rate under the LAF is at 5.75%, and the marginal standing facility (MSF) rate and the
Bank Rate are at 6.25%.
The Indian stock markets continued to correct in March. Investor sentiment was already weakened by the February’s sell-off
and the government’s decision to re-introduce a tax on long-term equity gains, after 14 years, to boost revenue. Exits by
institutional investors looking to avoid the tax by selling before March 31 contributed to the losses in late March. Stock
markets lost globally toward end of March as trade skirmishes between the US and China eroded demand for riskier assets.
Further investors offloaded positions ahead of March F&O expiry and financial year ending. The mid-caps have seen higher
price cuts in the recent correction, but their valuations are still high. In the January-Marchquarter, the Sensex plunged 3.2%
and Nifty slumped 3.96%, posting their first quarterly loss since December 2016. For the financial year 2017-18, the Sensex
rallied 11.3% and the Nifty surged 10% while the Nifty Realty was the biggest gainer with nearly 38% upside. The Sensex
reached a High of 34,278.6 and a Low of 32,483.8 in March and closed the month at 32,968.7, down from 34184 in the
previous month. The Nifty reached a High of 10,525.5 and a Low of 9,951.9 in March and closed the month at 10,113.7, down
from 10493 in the previous month.
FPI net investment in the equity market recoveredand rose by Rs. 11654.3 crore (US$1793 million). However, FPI
investment in the debt market turned negative for the first time this fiscal with a net outflow of Rs. 9043.9 crore (US$1391
million). FPI flows in stock markets more than halved to Rs. 260 billion in 2017-18 on fears of faster than expected rate hike
by the US Fed and higher valuations of Indian equities. However, a sharp turnaround was seen in FPI inflows into debt
markets in the fiscal as FPIs poured in a staggering Rs. 1.2 trillion against a net outflow of about Rs. 73 billion in 2016-17.
FPIs' cumulative net investment in the Indian equity market, since being allowed over two decades ago in November 1992,
were at Rs. 8.86 trillion till end 2017-18. The cumulative figure for debt securities has also grown to Rs. 4.2 trillion — taking
the total for both debt and equities to Rs. 13 trillion. Mutual Funds' net investments in the equity market rose by Rs. 9255.5
crore and in the debt market by Rs. 37977.5 crore in March. Global volatility pushed some investors into redeeming funds as
Indian markets fell 10% in little over a month from its January high. Inflows into Indian equity funds in March were the
smallest in 13 months. Inflows into balanced funds, which buy stocks and bonds, jumped 34% over February to Rs. 67.5
billion.
India's merchandise exports grew by 4.5% in February to $25.8 billion, driven by strong growth in chemicals (30.41%),
petroleum products (27.44%) and electronic goods (29.71%). Though exports in 18 out of 30 sectors grew, outbound
shipments of engineering, apparels, gems and jewellery, cotton textile and carpets reported negative growth. The gems and
jewellery sector is facing huge liquidity issue as banks are tightening their lending norms in the aftermath of the fraud
reported by PNB. Imports rose by a higher 10.4% to $37.8 billion during the month, leaving a trade deficit of $12 billion.
Import growth was driven by crude and products (32.05%, global Brent crude oil prices have increased 17.90% in February),
electronic goods (18.95%), machinery, electricaland non-electrical goods (23.04%). Gold imports declined by 17% to $2.89
billion in February as against $3.48 billion in the same month last year. Services exports during the month at $16.3 billion
outpaced imports of $9.8 billion.
Though the trade deficit narrowed to a five-month low in February it was considerably higher than the $9.5 billion in
February last year. During April-February period of the current fiscal, exports recorded a growth of 11% to $273.7 billion,
while imports grew by 21% to $416.87 billion. The trade deficit was $143.13 billion.
4. E-UpDates April 2018
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Contents Page
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Special Feature—Highlights of RBI’s First
Bi-monthly Monetary Policy Statement, 2018-19
Table of Contents
1. Key Rates to Remember
2. Indian Economy — Growth Indicators
3. Indian Economy — Price Indicators
4. Indian Economy — Banking Indicators
10. Global Economy — Economic Indicators
11. Global Economy — Stock Indices
12. Global Economy — Commodity Indices
5. Indian Economy — Exchange Rates
6. Indian Economy — Interest Rates
7. Indian Economy — Stock Markets
8. Indian Economy — Capital Flows
9. Indian Economy — Commodity Markets
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For more click:
http://www.ecofin-surge.co.in/terminology.html
2017-18* 6.6% Jan-18 7.5%
2016-17** 7.1% Jan-17 3.5%
As on 31-Mar-18 31-Mar-17 As of week ended 30-Mar-18 31-Mar-17
Repo rate 6.00% 6.25% CRR 4.00% 4.00%
Reverse repo rate 5.75% 5.75% TermDeposit>1Yr 6.25-6.75% 6.50-7.00%
MSF rate 6.25% 6.75% Base rate 8.65-9.45% 9.25-9.60%
CMR 4.90-8.45% 5.00-9.50% 10-YrGSecYld 7.42% 7.00%
Inflation CPI-C* CFPI-C* WPI** WPI-Food**
Feb-18 4.44% 3.26% 2.48% 0.07%
Feb-17 3.65% 2.01% 5.51% ...
*Base: 2012=100; **Base: 2011-12=100
Mar-18 64.17 28-Mar-18 65.04
Mar-17 50.90 31-Mar-17 64.84
US$ per barrel RBI Reference rate
Nikkei India PMI March
BSE Consumer
Sentiment Index*
Rural Urban All India
Manufacturing PMI 51.0 31-Mar-18 95.45 87.71 92.43
Services BAI 50.3 31-Mar-17 96.17 91.53 94.37
*Monthly Average
GDP IIP
QE; Base : 2011-12=100.
Oil Price (World Average)
*2nd AE and **1st RE (at 2011-12 prices).
US$/INR Rate
http://www.ecofin-surge.co.in/index.html
For explanations click:
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GDP Growth Rates
(at 2011-12 prices for IIP & WPI)
Q1 Q2 Q3 Q4 FY
2017-18 5.7 6.5 7.2 6.6 (2nd AE)
2016-17 7.9 7.5 7.0 6.1 7.1 (1st RE)
GVA at Basic Price by Economic
Activity
1 Agriculture, forestry & fishing 17,67,397 3.0 17,16,746 6.3
2 Mining & quarrying 3,82,204 3.0 3,71,066 13.0
3 Manufacturing 21,53,147 5.1 20,48,711 7.9
4 Electricity, gas, water supply &
other utlility services
2,62,923 7.3 2,44,934 9.2
5 Construction 9,15,878 4.3 8,78,110 1.3
6 Trade, hotels, transport,
communication and services related
to broadcasting
23,13,932 8.3 21,37,102 7.4
7 Financial, real estate & professional
services
26,12,670 7.2 24,37,857 6.0
8 Public administration, defence and
Other Services
15,56,327 10.1 6,37,056 12.7
9 GVA at basic prices (1 to 8) 119,64,479 6.4 112,47,629 7.1
Estimates of Final Expenditures
on GDP
10 Private final consumption 72,24,982 6.1 (55.6) 68,12,334 7.3 (55.9)
11 Government final consumption 14,00,183 10.9 (10.8) 12,62,124 12.2 (10.3)
12 Gross fixed capital formation
(GFCF)
40,86,592 7.6 (31.4) 37,97,875 10.1 (31.1)
13 Changes in stocks (CIS) 93,883 4.0 (0.7) 90,256 `-61.2 (0.7)
14 Valuables 2,72,240 70.4 (2.1) 1,59,735 `-13.9 (1.3)
15 Exports 25,99,495 4.4 (20.0) 24,89,079 5.0 (20.4)
16 Less (-) Imports 28,71,386 9.9 (22.1) 26,11,628 4.0 (21.4)
17 Discrepancies (GDP less 10 to 16) 1,97,909 `(1.5) 1,96,232 `(1.6)
18 GDP (10 to 17) 130,03,897 6.6 (100.0) 121,96,006 7.1 (100.0)
AE: Advance Estimates; PE: Provisional Estimates; RE: Revised Estimates.
*Over 1st RE of 2016-17 and **Over 2nd RE of 2015-16.
Growth Indicators
YoY
Growth**
(Share in
GDP) (%)
GDP [at Constant(2011-12) prices]
(using the new series of IIP and WPI with base
2011-12 released on 12th May, 2017.)
2017-18
(2nd AE)
Rs.Crore
YoY
Growth*
(Share in
GDP) (%)
2016-17
(1st RE)
Rs. Crore
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1 GVA at basic prices 119,64,479 6.4 112,47,629 7.1
2 Net Taxes 10,39,417 9.6 9,48,376 7.4
3 GDP (1+2) 130,03,897 6.6 121,96,006 7.1 (100.0)
4 Net Domestic Product (GDP less
Consumption of Fixed Capital)
115,46,654 6.7 108,26,074 7.0
5 Net factor income from abroad -1,38,436 -1,44,481
6 Gross National Income (4+6) 128,65,461 6.8 120,51,525 7.1
7 Net National Income (GNI less
Consumption of Fixed Capital)
114,08,219 6.8 10681594 4 7.0
8 Population (in million) 1,283 1.3 1,299 1.2
9 Per capita GDP (Rs.) 98,814 5.2 93,888 5.8
10 Per capita GNI (Rs.) 97,762 5.4 92,775 5.8
11 Per capita NNI (Rs.) 86,689 5.4 82,229 5.7
12 Per capita PFCE (Rs.) 54,901 4.7 52,443 5.9
AE: Advance Estimates; RE: Revised Estimates.
*Over 1st RE of 2016-17 and **Over 2nd RE of 2015-16.
Index of Industrial Production Oct-17 Jan-17 FY2017-18* FY2016-17*
General Index 122.5 123.1 132.3 7.5 4.1 5.0
1. Mining 100.8 114.4 114.5 0.1 2.5 4.8
2. Manufacturing 123.7 123.1 133.8 8.7 4.3 4.8
3. Electricity 149.8 138.9 149.5 7.6 5.3 6.3
1. Capital goods 97.6 98.8 113.2 14.6 4.4 3.0
2. Primary goods 122.1 122.0 129.1 5.8 3.7 5.3
3. Infrastructure/ Construction goods 132.0 128.7 134.1 6.8 4.4 4.9
4. Consumer durables 119.0 116.7 126.0 8.0 -0.3 4.1
Final indices for October 2017; *April–January.
Change (YoY, %)
2016-17
(1st RE)
Rs.Crore
YoY
Growth**
(%)
GDP [at Constant(2011-12) prices]
using the new series of IIP and WPI with base
2011-12 released on 12th May, 2017.
2017-18
(2nd AE)
Rs.Crore YoY
Growth* (%)
Index 2011-12 =100
Jan-18
102.5
101.7
121.0
125.0
141.6
149.7
120.0
123.6
117.5
120.5
101.5
102.5
125
129.7
122.6
122.3
90
100
110
120
130
140
150
160
2016-17 2017-18
IIP-Annual Averages (Base : 2011-12=100)
Mining & Quarrying
(14.373)
Manufacturing (77.633)
Electricity (7.994)
General Index (100.0)
Primary goods (34.048)
Capital goods (8.223)
Infrastructure goods
(12.338)
Consumer durables
(12.893)
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Wholesale Price Index
(Base: 2011-12=100)
(Annual Inflation %)
All
Commodities
100.00%
Primary Articles
22.62%
Food Articles
15.26%
Non-food
Articles
4.12%
Fuel&Power
13.15%
Manufactured
Products
64.23%
December-2017 115.8 (3.58) 131.7 (3.72) 144.1 (4.51) 119 (-0.34) 96.5 (8.39) 114 (2.54)
January-2018 115.8 (2.84) 129.7 (1.02) 140.6 (0.94) 120.7 (-1.33) 96.9 (5.10) 114.7 (3.13)
February-2018 115.8 (2.5) 128 (0.78) 137.8 (0.87) 120.6 (-2.74) 98.1 (3.67)) 115.2 (2.95)
Consumer Price Index
(Inflation %)
All India
General Index
(All Groups
combined)
Base 2010=100
Rural Areas (All
Groups) Base
2010=100
Urban Areas
(All Groups)
Base 2010=100
Industrial
Workers Base
2001=100
Rural
Labourers
Base 1986-
87=100
Agricultural
Labourers
Base 1986-
87=100
December-2017 137.2 (5.21) 139.8 (5.27) 134.1 (5.09) 286 (4.00) 906 (2.84) 900 (2.74)
January-2018 136.9 (5.07) 139.3 (5.21) 134.1 (4.93) 288 (5.11) 901 (2.85) 895 (2.87)
February-2018 136.4 (4.44) 138.4 (4,37) 134.0 (4.52) 287 (4.74) 896 (2.52) 889 (2.3)
Price Indicators
Build up of inflation in the financial year so far is 2.30% compared to a build up of 4.92% in the corresponding period of the previous year.
110.2
111.4
111.8
111.1
110.0
109.9
110.1
109.9
109.4
108.0
107.1
107.7
109.0
110.4
111.7
111.8
111.2
111.4
111.5
111.9
111.7
112.6
113.0
113.4
113.2
112.8
112.7
113.9
114.8
114.3
115.5
116.3
115.7
115.8
115.8
100.0
102.0
104.0
106.0
108.0
110.0
112.0
114.0
116.0
118.0
120.0
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
WPI (Base 2011-12=100)
2015-16 2016-17 2017-18
CPI Inflation –February 2018 Rural Urban Combined
Cereals & Pdcts. 2.33 1.51 2.10
Pulses & Pdcts. -17.02 -18.24 -17.35
Oils etc 0.74 1.66 1.09
Meat & Fish 3.90 2.22 3.31
Milk & Pdcts. 3.21 4.79 3.83
Vegetables 19.48 13.89 17.57
Food & Beverages 3.74 2.65 3.38
Fuel & Light 6.83 6.80 6.80
Clothing etc 5.49 4.18 5.00
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March 31, 2017 February 2018 March 2018
Reserve Money : 19,00,480 23,07,200 24,20,250
% change during the month 3.23 4.90
% change since March 31 21.40 27.35
(A) Components of Reserve Money (1+2+3)
1 Currency in circulation 13,35,270 17,90,030 18,30,020
% change during the month 2.90 2.23
% change since March 31 34.06 37.05
2 Banker's deposits with RBI 5,44,130 4,96,340 5,63,630
% change during the month 4.64 13.56
% change since March 31 (8.78) 3.58
3 "Other" deposits with RBI 21,090 20,830 26,600
% change during the month (1.09) 27.70
% change since March 31 (1.23) 26.13
(B) Sources of Reserve Money (4+5+6+7-8)
4 Net RBI credit to Government 6,20,810 4,46,030 4,65,550
% change during the month 1.20 4.38
% change since March 31 (28.15) (25.01)
5 RBI credit to Banks & Commercial Sector (3,09,280) (1,350) 67,630
% change during the month (97.44) (5,109.63)
% change since March 31 (99.56) (121.87)
5.1 RBI credit to banks(including NABARD) (3,16,570) (10,140) 53,600
% change during the month (83.10) (628.60)
% change since March 31 (96.80) (116.93)
5.2 RBI credit to Commercial Sector 7,290 8,790 14,030
% change during the month 19.59 59.61
% change since March 31 20.58 92.46
6 Net Foreign Exchange Assets of RBI 23,97,210 27,43,610 27,59,680
% change during the month 1.53 0.59
% change since March 31 14.45 15.12
7 Govt's Currency Liabilities to the Public 25,090 25,600 25,600
% change during the month - -
% change since March 31 2.03 2.03
8 Net Non-monetary Liabilities of RBI 8,33,350 9,06,690 8,98,200
% change during the month 2.92 (0.94)
% change since March 31 8.80 7.78
Note: (i) Figures in parentheses denote negative numbers.
Banking Indicators
COMPONENTS & SOURCES OF RESERVE MONEY AND THEIR VARIATIONS (Rs. crore)
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March 31, 2017 February 2018 March 2018*
M3 128,44,390 136,77,570 136,83,750
% change during the month 0.96 0.05
% change since March 31 6.49 6.53
(A) Components of M3 ( 1+2+3+4)
1 Currency with the public 12,63,710 17,19,890 17,52,850
% change during the month 3.11 1.92
% change since March 31 36.10 38.71
2 Demand deposits with banks 14,10,630 12,82,560 12,96,870
% change during the month 1.63 1.12
% change since March 31 (9.08) (8.06)
3 Time deposits with banks 101,48,950 106,54,290 106,13,050
% change during the month 0.55 (0.39)
% change since March 31 4.98 4.57
4 Other deposits with RBI 21,090 20,830 20,980
% change during the month (1.09) 0.72
% change since March 31 (1.23) (0.52)
(B) Sources of M3 (5+6+7+8-9)
5 Net bank credit to govt.(i+ii) 38,69,090 40,70,360 40,03,680
% change during the month 0.01 (1.64)
% change since March 31 5.20 3.48
i RBI's credit 6,20,810 4,46,030 4,49,300
% change during the month 1.20 0.73
% change since March 31 (28.15) (27.63)
ii Other banks' credit 32,48,280 36,24,330 35,54,370
% change during the month (0.13) (1.93)
% change since March 31 11.58 9.42
6 Bank credit to commercial sector (i+ii) 84,51,430 89,28,000 89,59,510
% change during the month 1.00 0.35
% change since March 31 5.64 6.01
i RBI's credit 7,290 8,790 9,190
% change during the month 19.59 4.55
% change since March 31 20.58 26.06
ii Other banks' credit 84,44,140 89,19,220 89,50,330
% change during the month 0.99 0.35
% change since March 31 5.63 5.99
7 Net foreign exchange assets of the banking sector 24,92,010 28,71,240 28,60,900
% change during the month 1.46 (0.36)
% change since March 31 15.22 14.80
8 Government's currency liabilities to the public 25,090 25,600 25,600
% change during the month - 0.0
% change since March 31 2.03 2.0
9 NNML of the banking sector (i+ii) 19,93,230 22,17,620 21,65,940
% change during the month (0.01) (2.33)
% change since March 31 11.26 8.66
i RBI's NNML 8,33,350 9,06,690 8,95,400
% change during the month 2.92 (1.25)
% change since March 31 8.80 7.45
ii Other bank's NNML(Residual) 11,59,880 13,10,930 12,70,540
% change during the month (1.94) (3.08)
% change since March 31 13.02 9.54
COMPONENTS & SOURCES OF MONEY STOCK (M3) AND THEIR VARIATIONS (Rs. crores)
Note: Figures in parentheses denote negative numbers. *: Data are of 16 March, 2018.
24. E-UpDates April 2018
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http://www.ecofin-surge.co.in/
Stock
Market
Country Risk
Indicator/
Country
(per US$)
Q4 February
USA 2.6 Feb 4.3 2.2 2.7 2.32 2.74 -1.1 Jan -818.7 125.7 AA+/Stable
Canada 2.9 Jan 2.4 2.2 1.9 1.69 2.17 -8.6 1.28 Jan -19.8 86.5 AAA/Stable
UK 1.4 Jan 1.6 2.7 2.6 0.72 1.41 -4.7 0.71 Jan -177.9 161.0 AA/-ve
Euro area 2.7 Jan 2.7 1.4 1.6 -0.33 0.50 -1.3 0.81 Jan 276.3 62.9 (EU)AA/Stable
Germany 2.9 Jan 5.5 1.4 1.8 -0.33 0.50 -5.2 0.81 Jan 282.3 166.4 AAA/Stable
France 2.5 Jan 1.2 1.2 1.5 -0.33 0.72 -0.9 0.81 Jan -69.6 AA/Stable
Italy 1.6 Jan 4.0 0.9 1.8 -0.33 1.76 5.2 0.81 Jan 54.6 BBB/Stable
Spain 3.1 Jan 4.0 1.1 1.3 -0.33 1.09 -3.0 0.81 Jan -29.5 BBB+/+ve
Russia 0.9 Feb 1.3 2.2 5.2 8.13 7.4 57.6 Jan 120.2 453.6 BBB-/Stable
Japan 2.0 Feb 1.4 1.5 2.5 -0.04 0.02 -1.0 107.00 Jan 47.0 1261.7 A+/ Stable
China 6.8 Feb 7.2 2.9 3.7 4.31 3.65 -2.1 6.30 Feb 437.9 3134.5 A+/Stable
Hong Kong 3.4 Q4 0.6 3.1 1.20 1.95 -1.7 7.85 Feb -62.6 443.4 AA+/Stable
Malaysia 5.9 Jan 3.0 1.4 3.68 3.95 5.7 3.87 Jan 24.1 103.7 A-/Stable
Singapore 3.6 Feb 8.9 0.5 -0.8 2.31 -0.1 1.31 Feb 46.1 AAA/Stable
South Korea 2.8 Feb -6.4 1.0 1.65 2.62 -1.4 1.60 Mar 93.2 394.8 AA/Stable
Taiwan 3.3 Feb -1.9 2.2 0.66 1.00 3.8 29.1 Feb 17.0 456.7 AA-/Stable
Thailand 4.0 Feb 4.6 0.4 1.05 2.42 2.7 31.2 Feb 12.2 212.7 BBB+/Stable
Brazil 2.1 Feb 2.8 2.8 6.30 8.04 9.2 3.35 Mar 66.5 377.0 BB-/Stable
Chile 3.3 Feb 8.9 2.0 0.36 4.48 0.9 605.00 Feb 9.5 38.4 A+/ Stable
Mexico 1.5 Jan 0.9 5.3 7.84 7.29 3.1 18.20 Feb -11.5 177.6 BBB+/Stable
South Africa 1.5 Jan 1.5 4.0 4.2 6.89 8.07 -4.5 11.90 Feb 4.2 50.0 BB/Stable
India 7.2 Jan 7.5 4.4 2.5 6.05 7.29 -5.0 65.2 Feb -157.1 422.5 BBB-/Stable
Note: Trade balance for last 12 months. FX Reserves at end of period.
*Per cent change of the major index in US$ terms between December 29, 2017 and April 04, 2018. **Foreign Currency Ratings by S&P.
04 April 2018
Global Economic Indicators
February
GDP Short-
term
Rate
Long-
term
Rate
Exchange
Rate
Trade BalanceIIP CPI PPI Share
Price
Growth*
Sovereign
Rating**
(% change on year ago) (%) (US$ bn.)
FX
Reserves
Economic & Financial Market Indicators for Major Global Economies
Growth Inflation Interest Rates External Sector
For more Countrywise Indicators and Updates visit:
3.4
3.2
3.6 3.7
2.8 2.8
3.1
3.3
2.8
2.4
4.2 4.0
2.2
2.4
2.6
2.8
3.0
3.2
3.4
3.6
3.8
4.0
4.2
2015 2016 2017 2018
WorldOutput, Inflation& Trade (% change, IMF, WEO Database & Updates)
GDP Inflation Trade
26. E-UpDates April 2018
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Units Descriptor Jan-17 Feb-17 Mar-17 Jan-18 Feb-18 Mar-18
Index Number* Non-Energy Commodities 84.73 85.78 84.36 87.32 88.44 87.84
Index Number* Agriculture 90.15 90.08 88.26 87.53 89.16 90.18
Index Number* Food 93.24 93.07 91.25 91.49 93.41 94.66
Index Number* Grains 77.89 78.11 77.40 86.09 86.86 89.11
Index Number* Metals & Minerals 74.54 77.94 77.34 88.57 88.61 84.47
Index Number* Energy 68.89 69.41 65.32 85.47 80.50 80.95
USD per Barrel Crude Oil, Brent 54.89 55.49 51.97 68.99 65.42 66.45
USD per Barrel Crude Oil Dubai Fateh 53.37 54.17 51.16 66.02 62.79 63.29
USD per Barrel Crude Oil WTI 52.51 53.40 49.58 63.67 62.17 62.76
USD per Million Metric British
Thermal Unit
Natural Gas, H H, Louisiana 3.26 2.82 2.87 3.88 2.67 2.69
USD per Metric Ton Coal, Australian Thermal 83.73 80.41 80.55 106.85 104.71 95.85
USD per Metric Ton Aluminum 1791.24 1860.75 1901.47 2209.73 2181.79 2069.24
USD per Metric Ton Copper 5754.56 5940.91 5824.63 7065.85 7006.52 6799.18
USD per Metric Ton Iron Ore 80.41 89.44 87.65 76.34 77.46 70.35
USD per Troy Oz. Gold 1192.10 1234.20 1231.42 1331.30 1330.73 1324.66
USD per Kg Rubber 2.16 2.23 1.97 1.50 1.46 1.44
USD per Kg Cotton 1.82 1.88 1.91 2.01 1.95 2.03
USD per Metric Ton Palm oil 809.00 774.00 734.00 677.00 663.00 681.00
USD per Metric Ton Sunflower Oil 817.00 808.00 783.00 784.00 794.25 790.00
USD per Metric Ton Soybean Oil 872.00 835.00 812.00 864.00 842.00 834.00
USD per Metric Ton Soybeans 425.25 427.00 404.00 405.00 418.00 433.00
USD per Kg Sugar, European 0.35 0.35 0.35 0.40 0.40 0.40
USD per Kg Sugar, U.S. 0.65 0.67 0.66 0.59 0.57 0.55
USD per Kg Sugar, World (ISA) 0.45 0.45 0.40 0.31 0.30 0.29
USD per Kg Tea*** 2.99 2.87 2.88 3.05 2.94 2.31
USD per Kg Coffee, Arabicas 3.72 3.67 3.53 3.06 3.00 2.98
USD per Metric Ton Rice, Bangkok 377.00 367.00 370.00 442.00 425.00 430.00
USD per Metric Ton Wheat, US 173.61 181.00 176.54 178.34 190.56 198.86
*World Bank commodity price indices for low and middle income countries (2010=100); ** Avg.of Colombo, Kolkata & Mombasa auctions.
Primary Commodity Indices*/ Prices
Global Commodity Prices
111.05
100.00
112.32
112.16
123.87
117.01
132.35
132.33
120.13
113.25
115.59
112.76
140.83
143.84
149.04
150.63
126.57
119.73
144.45
146.46
95.20
80.29
94.24
94.02
0.00 50.00 100.00 150.00 200.00
2015
2016
2017
2018
Observed& ProjectedPrice Movements, IMF WEO Database Crude Oil Index(Petroleum), Brent, West
Texas Intermediate, and the Dubai Fateh
Metals Price Index, Copper, Aluminum, Iron
Ore, Tin, Nickel, Zinc, Lead,and Uranium
Price Indices
Food Price Index includes Cereal, Vegetable
Oils, Meat, Seafood, Sugar, Bananas, and
Oranges
Agricultural Raw Materials Index includes
Timber, Cotton, Wool, Rubber, and Hides
Price
Industrial Inputs Price Index includes
Agricultural Raw Materials and Metals
Fuel and Non-Fuel Price Indices
27. E-UpDates April 2018
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Following are the Highlights of RBI’s First Bi-monthly Monetary Policy Statement, 2018-19:
Policy Measures
The Monetary Policy Committee (MPC) decided to keep the policy repo rate under the liquidity adjustment facility
(LAF) unchanged at 6.00%.
Consequently, the reverse repo rate under the LAF remains unchanged at 5.75%, and the marginal standing facility
(MSF) rate and the Bank Rate are at 6.25%.
The decision of the MPC is consistent with a neutral stance of monetary policy in consonance with the objective of
achieving the medium-term target for consumer price index (CPI) inflation of 4% within a band of +/- 2%, while
supporting growth.
Assessment
Global economic activity has gathered further momentum, both in AEs and EMEs, though financial
market volatility and potential trade wars pose a threat to the outlook. The US economy, which ended 2017 on a slightly
weak note, appeared to have bounced back in Q1:2018; the unemployment rate remains low with hiring around multi-
month highs. In the Euro Area, economic activity remained buoyant, although consumer spending and factory activity
slowed down due to the strengthening of the euro, but a consistently falling unemployment rate and elevated consumer
confidence continued to underpin the strength of the economy. The Japanese economy registered eight straight quarters of
growth till Q4:2017; available data for 2018 point to a slower start to the year with weak machinery orders and an easing
manufacturing PMI in February-March. Economic activity remained robust in EMEs in Q1:2018. The Chinese economy
started the year on a strong note; retail sales picked up pace indicating robust consumption, while industrial production
also registered a strong increase in Q1:2018 on improved mining and manufacturing activity. In Brazil, economic activity
is gaining momentum, driven by higher commodity prices. The Russian economy continued to recover in Q1; industrial
production expanded in January-February, after two months of contraction, while exports grew at a robust pace. In South
Africa, manufacturing PMI and business confidence, improved in Q1. Inflation remains below target in many key AEs
and EMEs.
World trade volume growth is expected to have been robust in Q1, as gauged from the data on container trade
throughput, air freight and export orders. After softening in February, from multi-year highs on increased production in
the US, crude prices hardened in the second half of March driven by rebalancing of supply by OPEC and Russia, and
drawdown of US inventories. Metal prices have come under selling pressure, with copper touching a three-month low in
March on uncertainty stemming from global trade protectionism and US monetary policy. Gold prices, which touched a
two-month low in March, have recently witnessed some uptick on fears of intensification of a trade war.
Global financial markets have turned volatile. Equity markets globally have shed most of the gains of the
previous quarter in a heavy sell off in February-March, caused by the US imposition of new tariffs on Chinese goods.
Yields in the US traded sideways on weaker than expected inflation pressures and the anticipated rate hike by the Fed.
Yields in other major AEs have fallen, while among EMEs, they have remained divergent. In currency markets, the US
dollar, which recovered somewhat in early March on an optimistic outlook of the economy, shed most of its gains in the
latter part of the month on a less hawkish stance of the Fed and on anxieties surrounding a possible trade war. The euro
continued to appreciate on an improving growth outlook for the region. Most EME currencies have retreated in the wake
of the recent market volatility and the improving US economic outlook.
In India GDP growth in 2017-18 at 6.6 per cent, according to the second advance estimates, was lower than 7.1
per cent in 2016-17 and the deceleration was broad-based. Private consumption growth – whose contribution to GDP
growth in 2017-18 was 68 per cent – moderated in the second half. GST implementation had an adverse effect on urban
consumption through loss of output and employment in the labour-intensive unorganised sector. Government expenditure
provided sustained support to aggregate demand, with a pick-up in pace in the second half. GFCF turned around in Q2
and accelerated markedly in Q3. Net exports dragged down aggregate demand in 2017-18 due to a surge in imports and
deceleration in exports in Q3, the latter being driven in part by GST-related working capital disruptions. Capital goods
production registered a 19-month high growth in January 2018, indicative of the likely traction in investment demand.
The manufacturing PMI remained in an expansionary mode for the eighth consecutive month in March.
Retail inflation, measured by year-on-year change in the CPI, fell from a high of 5.1 per cent in January to
4.4 per cent in February due to a decline in inflation in food and fuel. Food inflation declined by 120 bps in February,
pulled down by a sharp decline in vegetable prices, especially of onions and tomatoes, along with continuing deflation in
28. E-UpDates April 2018
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28
pulses. The fall in prices was also observed in other food components such as eggs, sugar, meat and fish, oils, spices,
cereals and milk. In the fuel and light group, inflation in respect of liquefied petroleum gas declined in line with
international price movements. CPI inflation excluding food and fuel, remained unchanged at 5.2 per cent for the third
consecutive month in February.
Liquidity in the system moved between surplus and deficit during February-March 2018. From a daily net
average surplus of Rs. 272 billion during February 1-11, liquidity moved into deficit during February 12-March 1,
reflecting a slowdown in government spending and large tax collections. After turning into surplus during March 2-15,
the system moved into deficit again during March 16-22 mainly on account of quarterly advance tax outflows.
Anticipating the seasonal tightening of liquidity at the end of March, the Reserve Bank conducted four additional longer
tenor (24-31 days) variable rate repo operations aggregating Rs.1 trillion, apart from the regular repo operations. In mid-
March, additional liquidity of Rs. 1 trillion got released into the system through redemption of Treasury Bills issued
under the MSS in April and May 2017. The Reserve Bank injected Rs. 60 billion and Rs. 213 billion on a net daily
average basis in February and March, respectively. The weighted average call rate inched closer to the policy repo rate
from 12 basis points below the policy rate in January to 7 bps in February, and 5 bps in March.
Merchandise exports decelerated in January and February 2018, pulled down by a slowdown in exports of
gems and jewellery, readymade garments and engineering goods. Imports also moderated in February due to a decline
in gold imports, lower growth in non-oil non-gold imports, and contraction in imports of transport equipment, vegetable
oils and pulses. As import growth continued to exceed export growth in January-February the trade deficit widened.
The CAD increased in Q3:2017-18, primarily on account of the higher trade deficit. Net FDI moderated in April-
January 2017-18 vis-à-vis the level a year ago. FPIs made net purchases in 2017-18, despite net sales in the wake of a
global sell-off in February. India’s foreign exchange reserves were at US$424.4 billion on March 30, 2018.
Outlook
GDP growth for 2018-19 is projected to improve, from 6.6 per cent in 2017-18, to 7.4 per cent – in the
range of 7.3-7.4 per cent in H1 and 7.3-7.6 per cent in H2 – with risks evenly balanced around this baseline path. There
are now clearer signs of revival in investment activity as reflected in the sustained expansion in capital goods production
and still rising imports. Global trade growth has accelerated which should encourage exports and reduce the drag from net
exports. The teething troubles relating to implementation of the GST are receding. Credit off-take has improved in the
recent period and is becoming increasingly broad-based. the long-term growth potential is also expected to be reinforced
by various structural reforms introduced in the recent past. On the downside, the deterioration in public finances risks
crowding out private financing and investment. Furthermore, even as global growth and trade have been strengthening,
rising trade protectionism and financial market volatility could derail the ongoing global recovery. In this unsettling
global environment, it is especially important that domestic macroeconomic fundamentals are strengthened, deleveraging
of distressed corporates and rebuilding of bank balance sheets persisted with, and the risk-sharing markets deepened.
CPI inflation in Q4:2017-18 is now projected at 4.5 per cent. It is projected to pick up from 4.4 per cent in
February 2018 to 5.1 per cent in Q1:2018-19 due to unfavourable base effects and then moderate to 4.7 per cent in Q2,
and 4.4 per cent in Q3 and Q4, with risks tilted to the upside. Overall food inflation should remain under check on the
assumption of a normal monsoon and effective supply management by the Government. The revised formula for MSP as
announced in the Union Budget 2018-19 for kharif crops may have an impact on inflation. International crude oil prices
have become volatile in the recent period, with a distinct hardening bias in the second half of March, imparting
considerable uncertainty to the near-term outlook. Indian domestic demand is expected to strengthen during the course of
the year. The statistical impact of an increase in HRA for central government employees under the 7th CPC will continue
till mid-2018, and gradually dissipate thereafter.
29. E-UpDates April 2018
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