India Macro Weekly: Borrowings remain weak, RBI governor talks debt markets

For the week ended August 27, 2016:
  • It was a low key data and policy week, with the highlight release being the foreign borrowing figures. India’s external borrowings came in at USD 1.2bn during July 2016, which is almost half the amount raised during the corresponding period of the previous year. While monthly numbers can be volatile, we consider the trend figure, which also suggests a slowing down over the past five months. 
  • Domestic credit growth, too, remains sluggish. This is indicative of the fact that business confidence in the future is still not back in broad terms.
  • While industrial production numbers remain subdued, minerals’ production in June 2016 was moderately strong with a 4.7% growth on a year on year (yoy) basis.  While coal, the largest contributor, was significant in the overall growth, iron ore production was the strongest.
  • Agricultural activity also stays strong, as area under Kharif production continued to increase compared to last year, though monsoons fell short during the past week.
  • Outgoing RBI governor, Dr. Raghuram Rajan spoke about the attractiveness of India’s debt markets at the present point in time, at a FEDAI function. He mentioned how recent reforms like the SARFAESI act, debt tribunals and bankruptcy code could further strengthen debt markets.
This summary is part of our weekly subscription based report – India Macro Weekly. To know about the subscription details, please write in at and we will respond to you as soon as we can.

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