Eefc Curb Stems Reserves Decline
Foreign currency assets of the RBI fell only marginally by $33 million over the week ended August 18, 2000. This is the seventh successive week when the RBI has reported a decline in forex reserves. Reserves are now down by 7.06 per cent from a peak of $38.34 billion touched in April.
The value of gold reserves remain unchanged at $2924 million for the second consecutive week. Special drawing rights, however, fell heavily by $10 million to $2 million. The total change in the foreign exchange reserves stood at $43 million over the week.
The decline in reserves has not been as sharp as in the previous week because of money from Exchange Earners' Foreign Currency (EEFC) account coming in.
Earlier this month, the RBI halved the limit available to exporters under the EEFC account to prop up the rupee after it hit a record low of 46.08 per dollar. The move, however, did not have much success.
Corporates responded to the central bank's action by opting for forward import contracts.Bank credit grew by 22.6 per cent year-on-year (YOY) over the fortnight, marginally lower than 23 per cent growth in the fortnight before, but substantially higher than the last year's growth of 15.2 per cent.
The higher growth in bank credit was mainly contributed by the substantial increase of non-food credit. This implies higher demand for credit from the corporate sector. The YOY growth of food credit in the current year is also much higher compared with the last year.
Aggregate deposits in the banking system has recorded a YOY growth of 14.8 per cent for the fortnight ended on August 11, the same as the fortnight before. The rise is, however, much lower than the YOY growth of 18.6 per cent in the last year.
Total deposits in the banking system were at Rs 8,56,806 crore on August 11, Rs 2,913 crore higher than the level at the end of last fortnight.
Demand deposits stood at Rs 1,21,907 crore, which is Rs 1,931 crore lower than the amount logged at the end of the last fortnight.
The YOY growth in investment was 16.5 per cent compared with 17.6 per cent in the fortnight before. The rise is even lower compared with last year's growth of 18.2 per cent.
The YOY growth of money supply over the fortnight ended on July 28 was 14.3 per cent, lower than 16.7 per cent in the comparable previous period.
Reserve money rose at a rate of 0.6 per cent over the week ended August 11, marginally higher than the growth of 0.3 per cent in the week before.