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  • Overview of India's Debt Market and Declining Interest Rates

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    Sandeep Borse
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    The document discusses the Indian debt market in September 2003. It notes that interest rates had declined due to a rise in liquidity from increased foreign exchange reserves growing from almost zero in 1991 to $73.82 billion in March 2003. Liquidity was the main factor driving lower interest rates in the past and continued to be important. Government borrowing and inflation were also influencing rates. The document examines factors like inflows, outflows, and liquidity positions that were impacting rates. It also reviews different debt instruments and funds available in the market at the time.

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    Birla Meeting Sept 031

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    Birla Meeting Sept 031

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    The document discusses the Indian debt market in September 2003. It notes that interest rates had declined due to a rise in liquidity from increased foreign exchange reserves growing from almost zero in 1991 to $73.82 billion in March 2003. Liquidity was the main factor driving lower interest rates in the past and continued to be important. Government borrowing and inflation were also influencing rates. The document examines factors like inflows, outflows, and liquidity positions that were impacting rates. It also reviews different debt instruments and funds available in the market at the time.

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
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    14 views19 pages

    Overview of India's Debt Market and Declining Interest Rates

    Uploaded by

    Sandeep Borse
    The document discusses the Indian debt market in September 2003. It notes that interest rates had declined due to a rise in liquidity from increased foreign exchange reserves growing from almost zero in 1991 to $73.82 billion in March 2003. Liquidity was the main factor driving lower interest rates in the past and continued to be important. Government borrowing and inflation were also influencing rates. The document examines factors like inflows, outflows, and liquidity positions that were impacting rates. It also reviews different debt instruments and funds available in the market at the time.

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    © All Rights Reserved
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    of 19

    May 12, 2014 1

    OVERVIEW OF DEBT MARKET



    MUMBAI SEPTEMBER 17
    TH
    2003
    May 12, 2014 2
    May 12, 2014 3
    DECLINE IN INTEREST RATES
    INFLATION
    CREDIT DEMAND
    GOVTS BORROWING
    EVENT RISKS
    May 12, 2014 4
    MARCH 2003
    BANKS DEPOSITS RS 1,278,000 CR
    FX RESERVES USD 73.82 BILLION
    APRIL 1991
    FX RESERVES ALMOST ZERO

    FX RESERVES GROWTH
    FROM 1991 TO 2003 RS 300,000 CR
    EFFECT ON BANKING DEPOSIT RS 600,000
    CR


    LIQUIDITY
    May 12, 2014 5
    LIQUIDITY
    May 12, 2014 6
    LIQUIDITY WAS THE SINGLE MOST
    IMPORTANT FACTOR FOR LOWER
    INTEREST RATES IN THE PAST
    May 12, 2014 7
    INFLOW OUTFLOW
    REDEMPTION 0.58 FEDERAL 1.66
    COUPON 0.65 STATE 0.20
    DEPOSIT 1.79 CREDIT 1.60
    TOTAL 3.02 TOTAL 3.46
    SLIPPAGE 0.20
    FX FLOWS ???? TOTAL 3.66
    YTD : USD 13
    BILLION
    0.61
    LIQUIDITY FY 04
    May 12, 2014 8
    May 12, 2014 9
    May 12, 2014 10
    May 12, 2014 11
    May 12, 2014 12
    THE GOD
    FATHERS
    DICTATE
    May 12, 2014 13
    SUMMARY



    STABLE RATES



    EXCESSIVE SHORT TERM VOLATILITY
    COUPON INCOME

    May 12, 2014 14
    DEBT EQUITY
    May 12, 2014 15
    May 12, 2014 16
    NO CREDIT RISK
    NO LIQUIDITY RISK
    ACTIVE MANAGEMENT OF
    INTEREST RATE RISK
    May 12, 2014 17
    JUN
    03
    MAR
    03
    DEC
    02
    SEP
    02
    JUN
    02
    MAR
    02
    TGSF 1 1 1 1 1 1
    IBA 1 2 1 2 2 2
    TIIF 3 3 3 3 3 3
    FIBF 1 1 1 1 2
    TMA 3 1 1 1 1 1
    TILF 4 3 4 4 3 3
    STIP 3 3
    CPR RANKING
    May 12, 2014 18
    FLOATING RATE FUNDS
    MONTHLY INCOME FUNDS


    ACTIVELY MANAGED
    INCOME FUNDS
    LIQUID AND SHORT TERM FUNDS
    May 12, 2014 19
    THANK YOU

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