Forex Reserves Up Just $9 M To $45.137 Bn

The foreign exchange reserves of the country have seen an accretion of only $9 million in the week ended October 19 as against a healthy addition of $149 million in the preceding week. The reserves stand at $45.137 billion during the week.

Dealers pointed out the reason for the slowdown in the accretion could be the leads-and-lag effect and settlement delays.

"The slowdown could only be attributed to the leads-and-lag effect and settlement delays as during the week ended October 19 there was good buying interest in the stock markets by the foreign institutional investors (FIIs) and also the rupee was steady in the 47.98-48.0350 range against the dollar," a foreign exchange dealer said.

 

A break up of the foreign exchange reserves shows that the foreign currency assets (FCA) rose by only $3 million to $42.202 billion and the special drawing rights (SDRs) increased by $6 million to $10 million. Gold reserves, however, remained unchanged at $2.925 billion.

The Centre's ways and means advances (WMA), a temporary overdraft facility provided by the Reserve Bank of India (RBI), stood at Rs 2,502 crore as on October 19. Normally, an auction is triggered off once the WMA crosses the Rs 10,000 crore limit. However, market observers expect an auction this week as the first cash reserve ratio (CRR) cut comes into effect next week and an auction will suck out excess liquidity from the inter-bank money market.

Reserve money, which encompasses currency in circulation, bankers' deposits and "other deposits" with the apex bank, has increased by Rs 1,644 crore in the reporting week over the previous week and stands at Rs 3,10,471 crore. In the financial year so far, the reserve money has grown by Rs 7,159 crore as against a growth of Rs 5,931 crore in the same period previous year.

Net RBI credit to the Centre has come down by Rs 2,284 crore to Rs 1,50,802 crore in the week ended October 19 over the preceding week, while the RBI credit to the banks and the commercial sector is up by Rs 1,765 crore to Rs 22,924 crore during the same period.

As per the latest weekly statistical supplement, the non-food credit offtake, which is a barometer of the industrial activity in the country, in the fortnight ended October 5 has increased by Rs 11,242 crore to Rs 4,92,337 crore over the preceding fortnight indicating that there could be some revival in the economic activity in the country.