Forex Reserves Rise $1.6 Billion.

MUMBAI: India's foreign exchange reserves increased $1.6 billion to $318 billion during the week ended August 19, largely on account of valuation changes.

Foreign currency assets, which predominantly include dollars, yen and euro, among others, increased by $1.6 billion, according to the latest data released by the Reserve Bank of India. Other components like special drawing rights (SDR) - currency with the International Monetary Fund - rose $19 million while reserves with IMF rose $12 million. The value of gold in reserves, however, did not rise during the week.

Spurred by an increase in time deposits and currency with the public, money supply for the fortnight ended August 12 rose Rs 25,744 crore to Rs 68,23,852 crore, as per the updated money-supply figures released by the Reserve Bank of India.

Demand deposits with banks reduced by 3.2%, or Rs 20,552 crore, during the period. On a year-on-year basis, total money supply, which includes bank deposits and cash in the economy, rose 17.3%, or Rs 10,04,586 crore.

Despite rising interest rates, bank advances picked up in the fortnight ended August 12. However, deposit growth slowed down. Data released by the Reserve Bank of India shows that banks mobilised only 10,440 crore of deposits while it gave Rs 43,657 crore in advances.

On a year-on-year basis, data show that advances have grown 20.3% while deposits have risen 17%. For the current financial year, the central bank has projected 19% growth in loans and 18% on deposits.

Source : economictimes.indiatimes.com