Capitalmind
Capitalmind
Actionable insights on equities, fixed-income, macros and personal finance Start 14-Days Free Trial
Actionable investing insights Get Free Trial
Charts & Analysis

Charts: Trade Balance Flat at $10.8 Bn, Rupee Depreciation Impact Vanishes

Export and Import growth slowed in August 2014, with the trade deficit nearly flat at $11 billion.

image

The problem isn’t evident here. We aren’t growing total trade that much:

image

and then, the year on year growth in both Exports and Imports have gone to below 3%.

image

Given that the rupee was nearly at Rs. 68 last year in August, and we are at 60/61 today, we have seen the rupee appreciate. This will of course impact imports but remember that not every export contract will change immediately after the rupee falls drastically. It could take a few months before exports increase.

image

While this is not good news, it’s strange that the impact of elections which should have set the economy up, is not really increasing. A slowing set of exports AND imports signifies a deeper problem. However these are early signs and if the situation has to get worse, that is at least two months away.

Like our content? Join Capitalmind Premium.

  • Equity, fixed income, macro and personal finance research
  • Model equity and fixed-income portfolios
  • Exclusive apps, tutorials, and member community
Subscribe Now Or start with a free-trial