Economy, Macro & Market Cycles

Repo Rate

The rate at which the Reserve Bank lends short-term funds to commercial banks against government securities.

Test: it is the policy rate at which banks borrow overnight from the central bank under the liquidity adjustment facility %

Revenue Deficit

The excess of the government's revenue expenditure over its revenue receipts.

Revenue Deficit = Revenue Expenditure - Revenue Receipts %

Economy, Macro & Market Cycles

Reverse Repo Rate

The rate at which the Reserve Bank borrows from commercial banks, absorbing surplus liquidity from the system.

Test: it is the rate the central bank pays banks for parking surplus funds with it %

Economy, Macro & Market Cycles

Rupee Depreciation

A fall in the rupee's value against another currency, so more rupees are needed to buy the same foreign amount.

Depreciation % = (New Rate - Old Rate) / Old Rate x 100, quoted as rupees per unit of foreign currency %

Economy, Macro & Market Cycles

Sector Rotation

The tendency for different sectors to lead at different points in the economic cycle, and strategies that attempt to follow it.

Test: relative performance shifts systematically between cyclical, defensive and rate-sensitive sectors as conditions change qualitative

Economy, Macro & Market Cycles

Soft Landing

An outcome in which monetary tightening slows inflation without causing a recession.

Test: inflation returns toward target while growth slows but stays positive and unemployment rises only modestly qualitative

Economy, Macro & Market Cycles

Stagflation

The combination of high inflation with weak growth and rising unemployment.

Test: inflation is elevated while output growth is weak or negative and unemployment is rising qualitative

Economy, Macro & Market Cycles

Statutory Liquidity Ratio

The proportion of deposits banks must hold in government securities, cash or gold.

Required SLR Holdings = Net Demand and Time Liabilities x Statutory Liquidity Ratio %

Economy, Macro & Market Cycles

Trade Deficit

The excess of the value of a country's merchandise imports over its merchandise exports.

Trade Deficit = Value of Goods Imports - Value of Goods Exports ₹ crore

Economy, Macro & Market Cycles

Unemployment Rate

The proportion of the labour force that is without work and actively seeking it.

Unemployment Rate = Unemployed Persons / Labour Force x 100, where the Labour Force excludes those not seeking work %

Economy, Macro & Market Cycles

Union Budget

The government of India's annual statement of estimated receipts and expenditure, presented on 1 February.

Test: the document states revenue and capital receipts, revenue and capital expenditure, and the resulting deficits for the coming financial year ₹ crore

Economy, Macro & Market Cycles

Wholesale Price Index

An index tracking prices of goods traded in bulk between businesses, before they reach the retail stage.

WPI = (Cost of the Wholesale Basket Now / Cost in the Base Period) x 100 index points