Govt'S Wma Drawals Down Rs 3310 Cr

The central government's recourse to central bank credit through ways and means advances declined by Rs 3,310 crore to stand at Rs 7,681 crore on July 17. It was Rs 10,991 crore a week ago, the Reserve Bank of India's (RBI) weekly statistical supplement (WSS) released on Saturday said.Money market players attributed the drop to the on-tap sale of the 11.55 percent 2001 government bonds on July 17 which mopped up Rs 2,898 crore. They said the figure would have declined further in the following week as the government issued Rs 4,000 crore worth of six- and ten-year government paper on July 23. The central government's recourse to ways and means advances was statutorily fixed at Rs 11,000 crore for the first half of 1998-99. The RBI's advances to state governments rose by Rs 207 crore to Rs 1,388 crore from Rs 1,181 crore a week ago, the WSS said.

 

The country's forex reserves rose by $49 million to $27.122 billion in the week ended July 24 on a corresponding rise in foreign currency assets (FCA), the WSS said. The reserves comprised FCA amounting $24.093 billion, gold valued at $3.020 billion and special drawing rights (SDRs) at $9 million. In the financial year so far, reserves were down by $2.245 billion. On a year-on-year basis, they dropped by $2.568 billion or 8.65 percent from $29.690 billion on July 25, 1997. Market players said the reserves, which were depleted largely on account of central bank intervention in the foreign exchange market during the year, might be bolstered on inflows from the State Bank of India's (SBI's) Resurgent India Bond scheme which is estimated to attract subscriptions amounting to at least $3.5 billion. With regards to schedule commercial banks' business in India, aggregate deposits stood at Rs 6,25,575 on July 17, up by 20 percent or Rs 1,04,372 crore year-on-year, the central bank statement said. The fortnightly growth in aggregate deposits was 0.3 percent, and the growth in the financial year so far was at 3.3 percent.

Banks' investments were at Rs 2,35,506 crore, up by 10.3 percent or Rs 21,933 crore year-on-year. Investments, however, were down in the fortnight by 1.2 percent and up by 7.7 percent in the year so far. Dealers said banks were hesitant to pick up government paper particularly for medium to long term maturities on account of uncertainty regarding interest rate expectations. Bank credit was at Rs 3,22,927 crore up by 16.4 percent or Rs 45,605 crore over the year. Growth was positive in the fortnight at Rs 933 crore, a growth of 0.3 percent, but remained negative in the financial year so far with growth down by 0.4 percent or Rs 1,079 crore. Investments in corporate instruments were at Rs 36,277 crore on June 19, up by Rs 2,096 crore in the year, the statement said.