Forex Reserves Down To $29,192 M

Forex reserves of the Reserve Bank of India (RBI) have declined by $176 million in the current financial year till May 8 to $29,192 million. Foreign currency assets (FCA) of the apex bank increased by $20 million while there has been a $207 million decline in the value of gold held by the RBI.

The FCA of RBI declined by $242 million during the week ended May 8, 1998 to $25,995 million. As per the weekly statistical supplement issued by the central bank, the stock of special drawing rights also dropped by $18 million to $13 million while the value of gold held by RBI was unchanged at $3,184 million.

Consequently, forex reserves of RBI declined by $260 million during the week.

Figures released by the RBI also reveal that the year-on-year growth in money supply (M3) was 17.3 per cent on April 24.

During the fortnight ended April 24, money supply grew by 0.5 per cent.

During the following week, i.e. the week ended May 1, there was a 5.4 per cent growth in reserve money.

The reserve money growth was propelled by a 9.1 per cent hike in net RBI credit to the government.

In the current fiscal, net RBI credit to government has increased by 5 per cent as against 3.1 per cent in the corresponding period last year.

There has, however, been a 8.9 per cent drop in the RBI credit to banks and the commercial sector against a growth of 3 per cent in the corresponding period in 1997-98. Thus, reserve money has grown by only 0.8 per cent in 1998-99 as against 3.2 per cent in the same period in 1997-98.

On the interest rate front, Rs 1,146 crore worth of CP was issued during the second fortnight of April at a discount of 9.25-15.50 per cent. for fortnight ended April 30 as compared to 11.75-18 per cent during the first fortnight of this fiscal.