Indian Rupee Faces Challenge as Credit Spread Widens
Indian Rupee Faces Challenge as Credit Spread Widens
May 17th,
from WikiFX. India's credit spread has widened year to date, hovering
around 260 basis points which can put Indian rupee in a difficult
situation in the coming weeks.To get more news about WikiFX, you can visit wikifx official website.
Markit India Manufacturing PMI and Services PMI both hit a record low
in April, at 27.4 and 5.4 respectively. A reading below 50 usually
indicates shrinking business activities.
According to a survey by
the Indian Economic Supervision Center (CMIE), the unemployment rate in
India will reach a record high of 27.1%. In order to help the Indian
economy severely affected by the epidemic, the Indian authorities have
taken action in fiscal and monetary policies. To date, stimulus measures
of about 1.7 trillion Indian rupees have been implemented, accounting
for about 0.8% of GDP.
India's credit spread has widened year to
date, hovering around 260 basis points. This credit spread is basically
the difference in yield between Indian AAA corporate bonds and the
sovereign government bonds of the same level.
With rising global
economic uncertainties and the possibility for India to lift social
distancing measures, the Indian rupee may face difficulties in the
coming weeks.
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