Sunday, May 26, 2013

Bearish trend to continue


Oil prices eased in Asia as poor housing and employment data from the United States sparked concerns of weaker crude demand in the world's biggest economy.

The economy has slowed down, business has slowed down. But this year, I expect the economy to grow at least by 1% more than last year. Next year, I expect it to grow another 1% more than the current year. We should soon reach our potential growth rate of 8%, said Finance Minister P Chidambaram.

The final FY13 GDP numbers are expected early next week and the GDP is widely expected to be around 5%. The Economic Survey pegged GDP growth between 6.1 and 6.7% for FY14. In its annual monetary policy announcement on 3rd May, the Reserve Bank had estimated growth for the fiscal at 5.7%.

The rupee touching nearly 9 month low against the dollar and Reserve Bank of India (RBI) has decided to relax norms for exporters. RBI had imposed a host of restrictions on both banks as well as corporates in December 2011 and subsequently in 2012 that were considered necessary for curbing their speculative behaviour. As the situation improved, many of these restrictions have been either relaxed partially or removed.

Thailand will not extend restrictions on exporting natural rubber when the measure expires on 31st May; curbs had little impact on prices. Most probably on Monday, TOCOM will be trading in negative.

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