Indian economic overview June 2015

From MCX Report

• Overall, the Indian rupee treaded a range-bound movement

in June 2015.

– USD–INR RBI reference rate June close was at 63.7549,

as against the May close of 63.7615 (a m-o-m change

of -0.01%).

– Contrasting factors, such as looming debt default crisis in

Greece and month-end dollar demand from importers, as

against better-than-expected June monsoon and US Fed

restraining from rate hike, kept the USD–INR exchange rate

movement range-bounded.

• The Reserve Bank of India (RBI) cut interest rates for a third time this year on June 2, taking advantage of subdued inflation.

• The RBI lowered the benchmark repo rate to 7.25% from 7.50%. The reverse repo rate also moved down by 25 basis points

to 6.25%. The RBI, however, has decided to keep the cash reserve ratio (CRR) unchanged at 4.0%.

• India's current account deficit (CAD) narrowed sharply to $1.3 billion, or 0.2% of GDP, in Q4 March 2015 from $8.3 billion, or 1.6% of GDP, in Q3 December 2014, according to RBI data (June 10).

• India's index of industrial production (IIP) rose at an accelerated pace of 4.1% in April over a year ago compared with the revised growth of 2.5% in March, 2105

• Data released on June 30, showed that the output of eight core industries increased 4.4% in May, y-o-y. The cumulative growth during April to May 2015 was 2.1%, y-o-y.

• Inflation based on consumer price index (CPI) touched 5.01% in May from 4.87% in April.

• The RBI data showed that growth in aggregate deposits and gross bank credit decelerated to 10.7% and 9.8% respectively in March 2015 from 13.9% and 13.8% respectively a year ago.

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