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Rpt. 22093579 27-Jun-2013

INDIA ECONOMICS WEEKLY : OVERSHOOTING RUPEE: DARK CLOUDS AND S DEUTSCHE BANK FI RESEARCH - BAIG, TAIMUR, ET AL

2 - 15

Rpt. 22084969 25-Jun-2013

CRISIL ECONOMIC INSIGHT JUNE 2013_CAN RUPEE SWIM AGAINST THE TIDE CRISIL LIMITED - RESEARCH TEAM, ET AL

16 - 25

Rpt. 22065762 20-Jun-2013

RUPEE WEAKNESS: STRUCTURAL OR CYCLICAL? ANAND RATHI SECURITIES PVT. LTD. - SINGH, GAUTAM, ET AL

26 - 42

These reports were compiled using a product of Thomson Reuters

www.thomsonreuters.com

1

Deutsche Bank Markets Research
Asia India Economics Date 27 June 2013
Taimur Baig, Ph.D Kaushik Das

India Economics Weekly
Overshooting rupee: dark clouds and silver lining
Balance of Payments update (Jan-March’13). India’s current account deficit (CAD) moderated to 3.6% of GDP (USD18.2bn) in Jan-Mar’13, from a record high 6.7% of GDP (USD31.8bn) in Oct-Dec’12. A substantial narrowing of the trade deficit (USD45.6bn in Jan-March vs. USD58.4bn in Oct-Dec) and further improvement in net invisibles (USD27.5bn vs. USD26.6bn) drove the outcome. The Jan-March BOP number confirms our long held view that the CAD will improve considerably through 2013. Reduction in gold and oil imports, coupled with an export recovery and stable invisibles ought to narrow the FY13/14 CAD by at least 1% of GDP, in our view (we forecast FY13/14 CAD to be USD80bn, 3.8% of GDP). Despite a lower deficit projection, we note that the financing environment has become challenging lately, causing a sharp depreciation of the rupee in recent weeks. But we think that once the dust settles, India's improving fiscal and external account balance, declining inflation, and sustained efforts to attract investors would help the financing situation improve and pave the way for an appreciation of the exchange rate later this year. Likely impact of the Rupee at 60. The rupee's slide continued this week even as global markets appeared to stabilize to some

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