Forex Reserves Shoot Up By $896 M To $58 Bn

Foreign exchange reserves burgeoned by a whopping $896 million in the week ended June 28 to $57.962 billion.

Since the beginning of this fiscal, the reserves grew $3.856 billion compared with a $1.19 billion rise in the corresponding period of the previous fiscal.

With the dollar's weakening trend against major global currencies, the Reserve Bank of India (RBI), through the state-run banks, has been actively mopping up excess greenback supplies from the market to prevent drastic appreciation of the rupee.

Further, revaluation gains, again because of dollar's decline, have added to the build-up of the reserves.

Market observers attribute the steady growth in the reserves to the central bank's desire to build a strong forex warchest. The aim being to cool off excessive volatility in the market.

The growth in the reserves was mainly because of the rise in foreign currency assets (FCA) by $895 million to $54.703 billion. Gold and special drawing rights (SDRs) remained unchanged at $3.249 billion and $10 million, respectively.

Ways-and-means advances (WMA), an overdraft facility extended by the central bank to the Centre, was well within the manageable limit at Rs 7,648 crore as on June 28.

Deposits of scheduled commercial banks (SCBs) grew by Rs 697 crore during the fortnight ended June 14. The outstanding aggregate deposits as on June 14 stood at Rs 11,97,290 crore.

From the beginning of this fiscal, the aggregate deposits rose by Rs 96,837 crore compared with Rs 41,883 crore in the corresponding period of the last fiscal.

The credit (food as well as non-food) extended by the SCBs was down by Rs 152 crore in the reporting fortnight. While non-food credit increased by a meagre Rs 71 crore, food credit declined by Rs 224 crore.

The outstanding bank credit stood at Rs 6,43,884 crore.

So far in this fiscal, non-food rose by Rs 51,585 crore compared with a decline of Rs 3,829 crore in the corresponding period of the preceding fiscal. Food credit stood at Rs 6,468 crore compared with Rs 8,807 crore in the corresponding period in the previous fiscal.