MUMBAI: India's foreign exchange reserves have gone down $1.4 billion to stand at $363.8 billion as of December 2 said the Reserve Bank of India on Friday to manage the stress arising out of FCNR(B) redemptions and moving out of foreign investors from the Indian markets.
"The fall in the reserves could be because of both FCNR(B) redemptions along with some intervention that the central bank has done in the Indian markets to arrest the sharp slide in the value of the Rupee against the dollar," said bankers.
According to data from NSDL, foreign investors have pulled out around Rs 17,391 crore from the Indian equities market and Rs 17,253 crore in the debt markets in first two weeks of December. Market sources said that the Reserve Bank could have intervened because of the large scale pull out.
Further the data released by the central bank also shows a fall of Rs 65,000 crore in credit growth to make the entire credit outstanding in the system come down to around Rs 72 lakh crore.
"Fall in credit in the system is usually seen in the first two quarters, however slowing down of credit demand in the system is directly responsible for this major de-growth," said industry observers.
A look into the historical credit growth data in the month of November for the last two years shows that it has risen by around Rs 30,000 crore in 2014 and around Rs 38000 crore in 2015.
Source: economictimes.indiatimes.com/