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Credit offtake in elevated levels: CARE Ratings
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IANS | 28 Dec, 2022
The credit offtake in India remained at elevated levels of 17.5 per cent
year-on-year (YoY), reporting robust growth for the fortnight ended
December 2, said credit rating agency CARE Ratings.
According
to CARE Ratings report, the growth is driven by a low base, non-banking
finance companies (NBFC), retail credit, higher working capital demand
driven by inflation and improvement in capacity utilisation ratio, and
rising demand for fresh capex.
The benefit of a lower base is
expected to ease in the next few fortnights, optically leading to lower
growth rates, CARE Ratings said.
With a large base, deposits saw a
slower growth at 9.9 per cent y-o-y compared to credit growth of 17.5
per cent for the fortnight ended December 2.
The credit offtake
expanded by over 1,000 bps due to a low base, retail credit,
inflation-led working capital requirement and MSMEs. It also increased
sequentially by 1.2 per cent from the immediate fortnight (ended
November 18), CARE Ratings said.
Deposits rates are expected to
go up further due to rising policy rates driven by higher inflation,
intense competition between banks for sourcing deposits to meet strong
credit demand, widening credit deposit gap, and lower liquidity in the
market, said CARE Ratings.
Over the last couple of years, (i.e.,
from February 28, 2020) credit offtake has mostly overcome the Covid
induced lag and has grown by around 29.7 per cent to almost catch up
with deposit growth of 31.4 per cent over the period, the credit rating
agency said.
In absolute terms, credit outstanding stood at Rs
131 lakh crore as of December 2, rising by Rs 19.5 lakh crore over the
last 12 months.
According to CARE Ratings, the credit offtake is
anticipated to remain resilient in FY23, while the benefit of lower base
will ease out in the next few fortnights, optically leading to lower
growth rates.
A slowdown in global growth due to elevated
interest rates, interminable pandemic restrictions in China, and
multiple rate hikes in India could impact credit growth, the CARE
Ratings report said.
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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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