Portfolio inflows boost forex by kitty $3 bn.

MUMBAI: Foreign exchange reserves rose sharply during the week ended August 6, largely on account of inflows through the portfolio investment route and partly due to revaluation of non-dollar assets in reserves.

The country’s forex reserves rose by $2,948 million in the week ended August 6. The reserves are at $ 287.3 billion. While foreign currency assets comprising dollars, British pounds and euro, among others, rose $2,528 million, the value of gold in reserves remained unchanged during the week.

Among other components of reserves, special drawing rights, or SDRs, — the reserve currency
with the International Monetary Fund (IMF) — and the reserve capital with the IMF rose by $35 million and $610 million, respectively.

Major global currencies were strengthened against the dollar during the week, resulting in revaluation of non-dollar reserve assets, said a senior treasury official with a private bank, requesting anonymity.

Banks have seen a dip in loans, but deposits have risen in the latest fortnight ended July 30. According to data released by the Reserve Bank of India (RBI), while deposits have risen by Rs 47,759.85 crore to Rs 46,39,595.43 crore, loans dipped by Rs 6,211.2 crore to Rs 33,57,265.34 crore during the fortnight. As for their investments, banks pumped in over Rs 9,000 crore on account of sluggish loan demand during the fortnight.

The updated money supply — cash, currencies and deposits — figures released by the central bank indicate that the total stock of money in the system amounted to Rs 57,91,002 crore as on July 30, up Rs 40,442 crore over the previous fortnight’s levels. At current levels, the annual (year-on-year) growth works out to be 14.7% compared to 20.6% in the year-ago period.

In other developments, both the Centre as well as state governments did not resort to any short-term borrowings from the central bank. Such borrowings are resorted to by the government to meet its daily revenue mismatches. These short-term borrowings are known as ways and means advances (WMAs), a facility under which governments borrow from the central bank to meet their daily revenue mismatches.

Source : economictimes.indiatimes.com