Indian Economic Overview

Indian Economic Overview: May 2015...!

From MCX Report

• The Indian rupee depreciated mildly in May 2015.

– The USD–INR RBI reference rate closed May at 63.7615, as against the March close of 62.5780 (m-o-mchange of 0.29%).

– Slowdown in inflows from sources such as foreign remittances along with high dollar demand, especially from oil companies, put pressure on the Indian rupee. Additionally, uncertainty over Greece’s default buoyed the dollar.

– A sharp depreciation in the rupee was averted on resilience of the domestic market and the U.S. Fed Open Market Committee meeting that indicated a delay in the rate hike.

• The RBI, on 28 May, advised banks to encourage large agricultural borrowers, such as agricultural commodity processors, traders, millers, and aggregators, to hedge their price risks in agricultural commodities.

• India's merchandise exports declined 13.96% to $22.05 billion in April 2015 over April 2014.

• The other economic data in April 2015 over April 2014 showed that imports declined 7.48% to $33.04 billion, oil imports fell 42.65% to $7.44 billion, and non-oil imports rose 12.58% to $25.60 billion. Trade deficit for April 2015 was estimated at $10.99 billion, a tad higher of the April 2014 deficit of $10.08 billion.

• Industrial output growth touched a five-month low in March to 2.1% from 4.9% in February on the back of an acrossthe- board slowdown in production.

• Indian wholesale prices fell 2.65% year-on-year in April 2015, following a 2.33% drop in the previous month, as petrol prices declined further and the growth in food costs declined. On the other hand, consumer price index-based retail inflation eased to a four-month low of 4.87% in April from 5.25% in March.

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