Forex reserves growth slows in first half

Accretion to the country's foreign exchange reserves showed a lower growth of $6.6 billion in the first half (H1) ended September 2004, against a rise of $16.2 billion in April-September 2003.

The current account balance showed net outgo (deficit) at $3.3 billion (net surplus of $2.2 billion in H1 of 2003-04). The valuation loss in reserves stood at $0.2 billion as against a benefit of $2.1 billion in the same period last fiscal, according to data released by the Reserve Bank of India here today.

The capital account (net) comprising foreign investment, banking capital, short term credit, external commercial borrowings and other items recorded a rise of $10.1 billion ($11.9 billion in H1 FY-04), it said.

The major sources of accretion to the reserves during April-September 2004 were foreign investment (39.4 per cent), external commercial borrowings (31.8 per cent) and short-term credit (30.3 per cent), it added.

Foreign investment inflows showed a lower growth of $2.6 bn ($5.1 bn). The net inflows under banking capital were down by $0.3 bn ($2.2 bn), while non-resident Indian deposits saw outflow of $1.3 bn (inflow of $2.2 bn).

Short term credit remained at $2 billion ($2 billion) and other items in capital account at $2.7 billion ($2.6 billion) were also sources of accretion.

External commercial borrowings grew by $2.1 bn ($0.2 bn), the RBI added.

The country's foreign exchange reserves as on December 17 stood at $130.62 bn.