Forex reserves jump $1 billion to $283 billion.

MUMBAI: Foreign exchange reserves rose sharply during the week ended July 23, largely on account of inflows through the portfolio investment route and partly due to revaluation of non-dollar assets in reserves.

The country’s forex reserves rose by $1,037 million in the week ended July 23. The reserves are at $282.9 billion. The entire pile-up in reserves during the week was on account of the growth in foreign currency assets comprising dollars, British pounds and euro, among others.

All other components of reserves, including the value of gold in reserves, special drawing rights, or SDRs — the reserve currency with the International Monetary Fund — and the reserve capital with IMF, remained unchanged during the week.

Bulk of the inflows was through the foreign portfolio investment route, which could have been mopped by the central bank. Besides, the euro, too, has moved steeply against the dollar, adding to the revaluation of non-dollar reserve assets, said a senior treasury official with a private bank, requesting anonymity. He also said foreign investors had bought stocks worth around Rs 3,500 crore during the week.

Banks pulled out around Rs 26,000 crore parked in mutual funds to fund the loan demand during the fortnight ended July 16. While as per the updated money supply figures, the total stock of money comprising cash, currencies and deposits dipped Rs 31,581 crore during the fortnight ended July 16 to touch Rs 57,50,560 crore as on July 16. At current levels, the annual year-on-year (YoY) growth works out to 15.2% compared with 20.3% in the year-ago period.

In other developments, the government maintained surplus funds worth Rs 15,166 crore as on July 23 with RBI, up Rs 8,587 crore over the previous week’s levels.

On the other hand, both the Centre as well as state governments did not resort to any short-term borrowing from the RBI. Such borrowings are resorted to by the government to meet its daily revenue mismatches. These short-term borrowings are known as ways and means advances (WMA) — a facility under which governments borrow from the RBI to meet their daily revenue mismatches.

Source : economictimes.indiatimes.com