Forex Reserves At All-Time High Of $49.225 Billion

India's forex kitty has surged by $298 million in the week ended January 18, 2002, over the preceding week to touch an all-time high of $49.225 billion. Analysts say this buoyancy in the reserves, which was due to good inflows from the foreign institutional investors and foreign direct investments, could not have come at a better time as the country has adopted an aggressive posture vis-a-vis Pakistan in its stand-off over cross-border terrorism.

In the last two months beginning November 23, India's foreign exchange reserves have burgeoned by a record $ 2.594 billion. Since the beginning of this financial year the forex reserves have jumped by $6.944 billion.

 

The growth in forex reserves in the latest reporting week is solely on account of the $298 million accruing to the foreign currency assets. The foreign currency assets now stand at $46.364 billion. The gold reserves and special drawing rights remained unchanged at $2.856 billion and $five million respectively.

The non-food credit offtake from the scheduled commercial banks (SCBs) in the country has gone up by Rs 6,301 crore in the fortnight ended January 11, 2002 over the preceding fortnight. The Centre's stepped up expenditure on account of mobilisation of the armed forces in the wake of Indo-Pak standoff is seen by economists as the main reason for increased non-food credit offtake.

In the fortnight ended December 28, 2001, the non-food credit offtake from the scheduled commercial banks in the country soared by Rs 9,909 crore as against a decline of Rs 384 crore in the preceding fortnight ended December 14, 2001.

In the one-month period beginning December 15, 2001 to January 11, 2002 the non-food credit has soared by Rs 16,210 crore. This increased offtake in non-food credit coincides with heightened tensions between India and Pakistan.

Bankers attribute the increased offtake in non-food credit to the union government raising resources for mobilising armed forces in the wake of the stand-off between nuclear-capable Indian and Pakistan on the issue of cross-border terrorism. "Offtake of credit by the trade & industry might constitute only a small part of the overall non-food credit offtake," pointed out a senior banker.

The new expenditure towards defence has not been accounted for in the budget of 2001-02, and hence becomes a contingent liability, they added.

In the financial year so far (April 1, 2001 to January 11, 2002), the non-food credit has risen by Rs 41,181 crore as against Rs 49,745 crore in the corresponding period in the previous financial year.

Food credit in the reporting fortnight ended January 11 has increased by Rs 919 crore over the previous fortnight. The outstanding food credit as on this reference date stood at Rs 53,195 crore.

In the reporting fortnight, aggregate deposits of the banking system surged by Rs 5,526 crore over the previous fortnight. While demand deposits have declined by Rs 1,524 crore, the time deposits have grown by Rs 7,050 crore in the reporting fortnight over the previous fortnight.

In the financial year so far, aggregate deposits have grown by Rs 1,10,615 crore compared with Rs 1,17,178 crore in the corresponding period in 2000-01. The outstanding aggregate deposits figure stands at Rs 10,73,233 crore.