Forex Reserves Rise By $ 526.9 mn.

MUMBAI: Foreign exchange reserves stood at $ 317.5 billion as on October 14, up $ 526.9 million over previous week, according to the weekly statistical supplement issued by the Reserve Bank of India. The rise in forex reserves was largely contributed by sharp rise in foreign currency assets which increased $ 519 million to touch $281.65 bn. The valuation of gold remained unchanged at $28.66 million.

Meanwhile, banks investments in mutual funds stood at 61,806 crore as on October 7, up by almost 14,000 crore over March end. This shows that banks continued to invest in mutual funds even as their borrowing from RBI under liquidity adjustment facility was 27,000 crore as on Cotober 7.

Secondly, all banks have to limit their investment in mutual funds to 10% of the net worth by December 2011. RBI imposed a 10% limit because it felt that bank were doing arbitrate by borrowing from them under LAF and investing in liquid mutual funds.

RBI data shows the annual money supply growth now stands at 16.2% compared to previous year's 15.8%. The total stock of money comprising cash currency and deposits with the banks amounted to 69,62,822 crore as on October 7, up 1,03,994 crore over the previous fortnight's levels.

Source : economictimes.indiatimes.com