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CII-IBA Q4 Financial Conditions Index up over 2016-17, falls below Q3
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SME Times News Bureau | 19 Feb, 2018
While the Confederation of Indian Industry (CII)-Indian Banks'
Association (IBA) Financial Conditions Index for the current fourth
quarter at 53.2 is showing an increase over the same period a year ago,
it marks a fall over the previous quarter and there is also a decrease
in the cost of funds index, CII said on Sunday.
Launched in April
2015, the CII-IBA Financial Conditions Index, serves as a key indicator
in assessing the short term financial conditions in the Indian economy.
"The
CII-IBA Financial Condition index for the Q4 FY2017-18 registered 53.2,
which on a year-on-year basis has shown an improvement of five points,"
a CII release said here.
"The External Financial Linkages index
and Economic Activity Index have shown an improvement in the Q4
FY2017-18 quarter vis-a-vis the last quarter while there has been a
compression in the cost of funds index," it said.
A total of 29
banks and financial institutions participated in the survey that
includes 11 public sector banks, 5 private sector banks, 2 foreign
banks, 2 co-operative banks, and 9 non- banking financial companies.
According to CII-IBA, the total asset of the respondents are
approximately Rs 68 lakh crore.
Among the sub-indices, the
highest contribution was made by the External Financial Linkages Index
followed by the Economic Activity index.
"Within external
financial linkages index, the respondents are very optimistic about the
increase in foreign exchange reserves and expectation of increase in the
money mobilisation through the ECBs (external commercial borrowings),
FCCBs (foreign currency convertible bonds), ADRs (American depositary
receipts) and GDRs (global depositary receipts (GDRs)," the release
said.
"The respondents are also quite optimistic about the increase in net capital inflows."
The Economic Activity index during the quarter in consideration recorded a value of 62.5, which was the second highest.
"The
increase in economic activity index is supported by the expected
increase in non-food bank credit and growth in real GDP. The growth in
real GDP recorded a value of 83 and non-food bank credit recorded a
value of 90, both higher than the previous quarter," it added.
According
to CII, the funding liquidity index for the current quarter registered
the value of 60.3, which was a sharp fall from the 85.9 recorded during
the previous quarter.
"Within the funding liquidity index,
mobilisation from the equity market recorded the highest value of 86,
followed by the mobilization in the money market which registered the
value of 83," it said.
"The liquidity adjustment facility has contracted in the current quarter."
"Industrial
activity and consequent linkages to the financial sector are contingent
on intervention in 3 spaces - fiscal, sectoral and monetary policy
space. There is a clear acknowledgement of actions that have been taken
by the Government in fiscal and sectoral space," CII Director General
Chandrajit Banerjee said in a statement.
Commenting on the Index
results for the fourth quarter, IBA Chairperson and Allahabad Bank Chief
Executive Usha Ananthasubramanian said: "Overall index reading is
optimistic about the financial sector though the cost of fund index has
contracted significantly. With inflation apprehension looming large,
coupled with drying up of excess liquidity from the system, the room for
rate action from the central bank does not exist."
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Customs Exchange Rates |
Currency |
Import |
Export |
US Dollar
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66.20
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64.50 |
UK Pound
|
87.50
|
84.65 |
Euro
|
78.25
|
75.65 |
Japanese
Yen |
58.85 |
56.85 |
As on 13 Aug, 2022 |
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