MUMBAI: The government parked Rs 38,595 crore with RBI during the week ended August 14, even as it struggles to successfully execute its record borrowing programme of Rs 4.51 lakh crore. Analysts, however, warned that a large chunk of the surplus (Rs 25,000 crore) is likely to be the surplus profit that the central bank had transferred last week to the government.
According to the latest figures released by RBI in its weekly statistical supplement (WSS), outstanding government surplus parked with the central bank rose by Rs 29,499 crore over the previous week’s levels. This is a sharp reversal in its day-to-day management of finances compared to a few months ago. The government borrowed over Rs 30,000 crore for weeks on end during most of April and early May to meet its revenue mismatches, often breaching its agreement with RBI of restricting such borrowings.
“Although the government has parked a large sum with RBI, it will be wrong to call it a huge surplus,” said Golaka Nath, senior vice-president at Clearing Corporation of India, the firm that clears and settles all government bond transactions in the country. “The government will actively draw upon this money in the coming days and as such, it has no implication for the borrowing programme,” he added.
Foreign exchange reserves, including gold and SDR, dipped $214 million during the week to touch $271 billion. While foreign currency assets dipped $214 million, reserves with IMF and SDR dipped $1 million and $4 million, respectively.
The value of gold in reserves remained unchanged during the week. A large part of the cross-currency revaluation as the dollar has been volatile against major global currencies of late.
Almost 40% of the reserves is believed to have comprised non-dollar assets, including the sterling pound, yen, euro and the yuan, though no central bank makes their currency composition of reserves public. In such a situation, it is estimated that a sizeable portion of the rise in reserves during the week has been on account of revaluation.
Source : ET