Readings: Debt ratings, 17% inflation?, Exchange traded currency futures
India’s industrial production grew at the slowest pace in more than six years and Standard & Poor’s said it may cut the nation’s credit rating to junk if the economy deteriorates further.
Overseas investors have sold a net $6.56 billion of Indian stocks and the rupee has slid 8.3 percent since January.
The risk of a credit downgrade comes just 18 months after India was lifted to the investment category by S&P for the first time since 2002. A one-notch drop in its ranking would place India on par with Indonesia, El Salvador and Guatemala.
Of one thing there’s little doubt - we’re about to experience a slowdown in growth greater than what most people seem to be accounting for.
- Economic Times: Inflation to touch 17 pc by September: Barclays
Global investment banker Barclays Capital has projected that inflation may surge to 17 per cent by September on back of another round of hike in fuel prices in the same month.
According to the report, the government is likely to hike fuel prices between 10 and 20 per cent again as early as September to limit fiscal risks.
Over the next two quarters, manufacturing sector inflation would add to 200-300 basis points to the headline WPI rate, food and oilseed inflation would add 100-200 basis points, and energy inflation a further 100-150 basis points
High inflation = Borrowing from future growth.
- Hindu Business Line: Exchange-traded currency futures likely to take off by mid-August
Exchange-traded currency futures will become a reality in the Indian market in the next three-to-four weeks.
In India, currency futures are already allowed in the over-the-counter (OTC) market. But exchange-traded currency futures have so far not been allowed in view of the imperatives of the control on the capital account.
Get on with it already! What’s the contract size going to be? Margins? Taxes?
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