| Date: |
13-11-2010 |
| Subject: |
Forex Reserves Rise Over $2 b to Touch $300-b Mark |
|
MUMBAI: India’s foreign exchange reserves once again crossed the $300-billion mark on November 5, as the central bank started mopping up capital inflows. This is the first time since the global financial crisis deepened in September 2008 that the central bank’s stock of reserves crossed the $300-billion mark.
The country’s forex reserves rose $2.26 billion in the week ended November 5. The reserves are at $300.2 billion. Foreign currency assets comprising dollars, British pounds and euro, among others rose $2,193 million in the week. The value of gold in reserves, however, did not change.
Special drawing rights (SDRs) the reserve currency with the International Monetary Fund and the reserve capital with the IMF rose $43 million and $22 million, respectively.
The last time the reserves were above the $300-billion mark was in 2008. However, foreign investors started pulling out their investments after the global financial crisis deepened in September 2008. Foreign currency dealers said that the central bank has started buying dollars from the market to prevent excessive appreciation of the rupee.
The central bank makes public its forex intervention figures after more than a month’s lag. At current levels, India is the fourth-largest holder of foreign currency reserves in South Asia; behind China, Japan and Taiwan. While China and Japan have over a trillion billion in reserves, Taiwan has close to $400 billion.
In other developments, the Centre has reduced its surplus revenues parked with the central bank by Rs 23,791 crore to about Rs 12,768 crore. While at the same time, it didn’t resort to any short-term borrowings from the central bank. Such borrowings are resorted to by the government to meet its daily revenue mismatches.
These borrowings are known as ways and means advances (WMAs) a facility under which governments borrow from RBI to meet their daily revenue mismatches. State governments, on the other hand, hiked their WMA by Rs 252 crore in the week ended November 5, to Rs 1,691 crore.
Source : economictimes.indiatimes.com
|