Forex Reserves Decline By $218 Million

Foreign exchange reserves saw a fall of $218 million to touch $37.412 billion as on May 19, 2000, according to a recent weekly statistical supplement issued by the Reserve Bank of India (RBI).

The fall in reserves was due mainly to a decline in foreign currency reserves (FCR) from $212 million to $34.515 billion.

Analysts said the paring of foreign currency assets could be because of foreign institutional investors effecting sales on the stock market and repatriating some money.

Meanwhile, gold reserves remained unchanged at $2,895 million, while value of special drawing rights (SDR) held by the RBI has dropped by $6 million to $2 million.

The central government's borrowings from the RBI touched Rs 7,297 crore as on May 19, 2000, under ways and means advances (WMAs). The Centre has set the limit under WMA at Rs 11,000 crore for the first half of the current fiscal.

However, the borrowing of Rs 7,297 crore is lower by Rs 3,350 crore over the previous week. In order to cut the central government's borrowings, the RBI placed the 10.79 per cent 2015 security on-tap and raised Rs 2,683 crore.

The state governments' borrowings have come down marginally by Rs 191 crore to Rs 2,514 crore. The total flow of funds towards the commercial sector stood at Rs 4,79,124 crore as on May 5 against Rs 4,69,614 crore as on March 24, 2000.

Reserve money has shown signs of rising consistently in the previous two weeks. It touched 7.5 per cent on a year-on-year basis on May 19 from 3.5 per cent in the previous week. In absolute terms it stood at Rs 2,80,147 crore.

Currency in circulation has gone up by 10 per cent to Rs 2,10,556 crore, while bankers deposits with the RBI stood at Rs 67,122 crore. The sources of reserve money such as the RBI credit to banks and commercial sector _ which is refinance given by the RBI _ went up by Rs 4,759 crore as on May 19, up 19 per cent over the previous week.

Net RBI credit to government has declined by Rs 281 crore to Rs 1,53,379 crore. Meanwhile, the outstanding commercial paper (CP) as on May 15 stood at Rs 6,599 crore and a total 1,948 CPs were issued between April 30 and May 15. These CPs were issued in the interest rate band of 9-11 per cent.

Meanwhile, the RBI has sold securities worth Rs 41 crore by way of open market operations as on May 19, while Rs 151 crore has devolved on it.