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OVERVIEW OF DEBT MARKET

MUMBAI SEPTEMBER 17
TH
2003
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DECLINE IN INTEREST RATES
INFLATION
CREDIT DEMAND
GOVT’S BORROWING
EVENT RISKS
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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
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LIQUIDITY
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LIQUIDITY WAS THE SINGLE MOST
IMPORTANT FACTOR FOR LOWER
INTEREST RATES IN THE PAST
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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
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THE GOD
FATHER’S
DICTATE
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SUMMARY



STABLE RATES



EXCESSIVE SHORT TERM VOLATILITY
COUPON INCOME

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DEBT EQUITY
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NO CREDIT RISK
NO LIQUIDITY RISK
ACTIVE MANAGEMENT OF
INTEREST RATE RISK
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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
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FLOATING RATE FUNDS
MONTHLY INCOME FUNDS


ACTIVELY MANAGED
INCOME FUNDS
LIQUID AND SHORT TERM FUNDS
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THANK YOU

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