Forex Reserves On Course To Surpass $45 Billion Mark

Foreign exchange reserves of the country looks set to cross the $45 billion mark on the back of a $361 million accretion which saw the forex kitty touch $ 44.951 billion in the week ended August 24 against $ 44.590 billion in the previous week ended August 17.

The growth in reserves is solely on account of $361 million accruing to the foreign currency assets (FCA). The FCA as on August 24 stood at $ 42.176 billion against $ 41.815 billion in the previous week. Gold reserves and special drawing rights remained stagnant at $ 2,771 million and $ 2 million, respectively.

Reserve money during the reporting week inched up by 0.9 per cent (Rs 2,786 crore) to Rs 3,07,910 crore over the previous week.

That there is a healthy accumulation of deposits with commercial banks is underscored by the fact that the bank' deposits with the Reserve Bank of India, which forms one of the components of reserve money, by way of maintaining cash reserve ratio (CRR) has jumped by 6.8 per cent (Rs 4,820 crore) to Rs 75,941 crore in the week ended August 24 against Rs 71,120 crore in the previous week.

"Given the fact that there are very few safe investment avenues for investors it is no wonder that banks deposits are burgeoning," according to an economist with a foreign bank.

As per the latest data available with the RBI, aggregate deposits of the scheduled commercial banks went up by Rs 3,049 crore in the fortnight ended August 10 to touch Rs 10,24,828 crore over the previous fortnight. The growth in deposits in the financial year (April, 2001 to August, 2001) so far stood at Rs 62,210 crore (6.5 per cent) as against Rs 45,857 crore (5.6 per cent) in the corresponding period in the previous fiscal.

The currency in circulation, which is another component of reserve money, has nudged up by Rs 2,404 crore (1 per cent) to touch Rs 2,28,071 crore in the week ended August 24 against the previous week.

Net RBI credit to the government (including to the centre and states) rose by 0.4 per cent (Rs 693 crore) to touch Rs 1,56,133 crore over the previous week. The RBI's credit to the banks and commercial sector rose by 8.2 per cent (Rs 1,496 crore) to touch Rs 19,647 crore in the reporting week over the previous week.

The government has raised a gross amount of Rs 70,000 in the financial year thus far (up to August 24) against Rs 58,183 crore raised in the same period last fiscal.