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High Frequency Indicators Point to Recovery High frequency indicators point to recovery: RBI RBI bought net $3.99 bn in spot forex market in RBI says banks reluctant to Dec lend to big business All high frequency indicators point to a recovery based on a revival of consumption, but private India's central bank bought a net $3.99 billion The Reserve Bank of India (RBI) investment is lagging despite a growth promoting rupees from the spot foreign exchange market in has expressed concern over the budget, according to RBI's February assessment of December compared to a net purchase of $10.26 contraction in credit offtake by the economy in its monthly bulletin. billion in December, its monthly bulletin released on large industries and Monday showed. The Reserve Bank of India bought In terms of nominal GDP, 96 per cent of pre- infrastructure and pointed out $10.01 billion while it sold $6.02 billion in pandemic economic activity has been restored, that there’s reluctance on the December, data showed. The rupee had moved in a assuming that the National Statistical Office’s first part of bankers to lend to large range of 73 to 73.96 per dollar in December. industries. advance estimates hold. All high frequency indicators point to a recovery based on a revival of The net outstanding forward purchase stood at The central bank also raised consumption is underway. But it could be short- $39.79 billion as of end-December, compared with a concern over the sharp lived, the Bulletin warned. " The jury leans towards net purchase of $28.34 billion at the end of deceleration in credit growth in such recoveries being shallow and short-lived " said November. The RBI also bought dollars in the the home loan segment and the report by RBI deputy governor Michael Patra currency futures market, with the outstanding net the adverse effect it may have and him team of 19 economists. " …. currency futures position rising to $1.96 billion…. on sectors like steel, cement Source : Economic Times Source : Live Mint and construction. The recent https://economictimes.indiatimes.com/news/economy/indicators/high- https://www.livemint.com/market/stock-market-news/rbi-bought-net-3-99- decline in credit growth was frequency-indicators-point-to-recovery-rbi/articleshow/81277915.cms bn-in-spot-forex-market-in-dec-11614573842066.html mainly due to large industries, the central bank said in its RBI wary of contraction in credit to firms study on ‘Sectoral deployment Contraction of credit to large industries and infrastructure remains a cause of concern, the Reserve Bank of of bank credit’. “Owing to the India (RBI) said. However, credit growth to medium industries has accelerated, pointing to the positive impact stressed assets in large of measures taken by the government and RBI, the bank said in its monthly bulletin. industries, there was a general reluctance on the part of “The muted credit offtake in the recent past needs to be seen in the context of economic slowdown coupled bankers to lend to these with the covid-19- induced lockdown," it said. industries, with the problem Source : Live Mint getting compounded by the https://www.livemint.com/industry/banking/bank-credit-to-large-industries-infrastructure-a-concern-rbi-11614598278688.html pandemic,” the RBI said. “Contraction in credit to large Bonds jitters setting markets in 'completely new light': BIS industries and infrastructure remains a cause of concern,” The swift rise of borrowing costs on global bond markets over the last month could completely alter the the report said. Credit to outlook for financial markets, according to the central bank for the world's central banks, the Bank for industry contracted by 1.3 per International Settlements. In its latest quarterly report, the Swiss-based BIS also noted how wild retail trading- driven swings in stocks such as GameStop recently had helped whip up volatility. cent in January 2021 as compared to 2.5 per cent The big shift however has been in the U.S. Treasury markets that tend to propel global borrowing costs on the growth in January 2020 mainly sense that unprecedented stimulus will ignite inflation if COVID-19 vaccines allow economies to fully reopen due to contraction in credit to this year. large industries by 2.5 per cent Source : Business Today (2.8 per cent growth in January https://www.businesstoday.in/markets/market-perspective/bonds-jitters-setting-markets-in-completely-new-light-bis/story/432692.html 2020). The outstanding bank credit to large industries Sebi proposes to revamp norms related to independent directors declined by Rs 59,610 crore on a year-on-year basis to Rs 22.78 The Securities and Exchange Board of India (Sebi) on Monday proposed to revamp norms pertaining to lakh crore as on January 29, appointment, removal and remuneration of independent directors (ID). The regulator has proposed that 2021, according to the latest independent directors' appointments and re-appointment shall be subject to the dual approval system firstly RBI data. approval of shareholders and approval of majority of minority shareholders would mean those other than the promoter and promoter group. Source : Indian Express https://indianexpress.com/article/business/e conomy/rbi-says-banks-reluctant-to-lend-to- If either of the requirements are not met, a new person will not be appointed and existing independent big-business-7210245/ directors can't be removed and the company will either have to propose a new candidate or propose ….. Source : Live Mint https://www.livemint.com/companies/news/sebi-proposes-to-revamp-norms-related-to-independent-directors-11614618565312.html Disclaimer: This document has been prepared by A. K. Capital Services Limited and/or its subsidiary/ affiliate/ group/ associate company(ies) (together referred to as “A.K. Group”) and the contents of this disclaimer are applicable to this document and to any and all written or oral communication(s) made by A.K. Group or its directors, employees, associates, representatives and agents. The information contained in this document is strictly confidential and solely for the information of the recipients. 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