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Economic pickup will support borrowers but Covid risks remain high: Moody's
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SME Times News Bureau | 14 Oct, 2021
Over the next three to six months, auto loan delinquency rates will
stay elevated, though broadly stable from current levels, Moody's
Investors Service said in its comment on auto loans.
Indian auto
loan asset backed securities (ABS) delinquency rates have improved
alongside the easing of coronavirus restrictions over recent months, but
remain elevated.
Delinquency rates will stabilise at high levels
as coronavirus restrictions ease, Moody's said, citing that Indian auto
ABS delinquency and collection rates improved in June and July as
economic activity picked up after coronavirus restrictions eased.
"While
economic conditions have improved, this year's virus outbreak has
eroded borrowers' financial reserves. Over the next three to six months,
we expect delinquency rates will stay elevated at around current levels
as many borrowers continue to deal with the pandemic's economic after
effects," the ratings agency said.
"The Indian auto ABS we rate
benefit from non-amortizing cash reserves and substantial excess
spread," Moody's said, adding that these features mitigate risks from
elevated delinquency rates for Indian auto ABS, because they provide
deals with liquidity and buffers against losses.
Auto ABS
performance improved because the pickup in economic activity over recent
months raised demand and rates for goods transportation. Improving
conditions for goods transportation are positive for the Indian auto ABS
sector, because deals mostly securitise loans to commercial vehicle
operators who earn income by moving freight.
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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
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87.50
|
84.65 |
Euro
|
78.25
|
75.65 |
Japanese
Yen |
58.85 |
56.85 |
As on 13 Aug, 2022 |
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