Market developments – Indian CAD/GOVT BORROWING



FX markets are closed today, as banking transactions would not take place due to year end accounting requirements.

Indian CAD was reported at 2.5% of GDP in q3 2018-19 as against 2.1% in previous fiscal. CAD was at USD 16.9 bn USD in Oct-Dec 2018 as against USD 13.1 bn in previous fiscal during the corresponding period. BOP deficit was at USD 4.3 bn. considering robust inflows in Q 4 (Jan-March period), and CAD lower than previous quarter, BOP may turn into surplus.

GOI announced its borrowing program for H1 of new fiscal. Govt is expected to borrow 4.42 lac Cr in H1 as against full year target of 7.1 lac Cr. Treasury yields could be under pressure due to oversupply of bonds.

Cash spot discount widened to 45 ps for USD on Friday last due to pressure on banks to sell their Dollars for Rupee liquidity.

Focus is on RBI policy due on April 4 th.

US-China talks progress have also supported Global markets.




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