Forex Kitty Up By $260m To $46.891 Bn

Foreign Exchange reserves burgeoned by $260 million to $46.891 billion during the week ended November 30 compared with $162 million rise during the week ended November 23. The reserves seem to top the $47 billion mark.

The healthy accrual to the reserves is mainly because of the rise in foreign currency assets by $335 million to $44.024 billion. While gold reserves declined by $75 million to $2.862 billion, special drawing rights remained unchanged at $ 5 million. So far, in the current fiscal, the reserves have jumped by $4.61 billion.

Analysts attributed the accretion to the wide differential between interest rates in the US and India. While the Federal Reserve has cut the rate 10 times in the current calendar year, the Reserve Bank of India has cut the bank rate only thrice. An interest-rate differential of about 400 basis points is spurring the forex inflows, they said.

During the week, the reserve money has risen by Rs 9,510 crore (3.1 per cent) to Rs 3,18,547 crore.

Bankers' deposits with the RBI, which is one of three components comprising reserve money, has jumped by 18.7 per cent (Rs 12,059 crore) to Rs 76,692 crore, while the currency in circulation declined by Rs 2,382 crore to Rs 2,38,693 crore and 'other' deposits with the RBI have declined by Rs 167 crore to Rs 3,163 crore.

So far, in the current fiscal, the reserve money increased by 5 per cent (Rs 15,236 crore) compared with 1.4 per cent (Rs 3,281 crore) rise in the corresponding period previous fiscal.

Meanwhile, non-food credit from the banking system is showing signs of revival. During the fortnight ended November 16, non-food credit, an indicator of advances extended by banks in the country to the corporates, rose by Rs 3,536 crore compared with Rs 14 crore rise in the previous fortnight.

So far, in the current fiscal, non-food credit increased by Rs 25,953 crore compared with Rs 34,996 crore in the corresponding period of the previous fiscal. The outstanding non-food credit of scheduled commercial banks now stands at Rs 4,97,395 crore.