Due to hardening global interest rates, India is likely to gain $7-8 billion this year on surplus foreign exchange reserves invested by the Reserve Bank in central banks of other countries and the International Monetary Fund (IMF). | |
| "During the year 2005-06 (July-June), the return on foreign currency assets and gold, after accounting for depreciation, increased to 3.9 per cent from 3.1 per cent during 2004-05, mainly because of hardening of global short- term interest rate," said a report on foreign exchange by the Reserve Bank of India (RBI). |
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| The return of foreign exchange invested abroad by the RBI, on behalf of the Union government, fetched around $6 billion between July 2005 and June 2006 as interest. |
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| Interest rate earnings on foreign exchange reserves was merely 2.1 per cent in 2003-04 and 3.1 per cent a year later. |
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| Analysts said with foreign direct investment expected to cross $20 billion this financial year and rising flow of funds through NRI remittances and Foreign Institutional Investors, India will soon be among the top league of countries with largest foreign exchange reserves. Foreign exchange reserves is already touching $219 billion. |
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| Earlier, the finance ministry had asked the RBI to lend $5 billion for investment in the infrastructure sector for capital imports. |
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