The Reserve Bank of India (RBI) on Tuesday stated in its half yearly report on management of forex exchange reserves that the valuation loss in its foreign exchange reserves, mainly due to the appreciation of the US dollar against other currencies, amounted to $11.8 billion during fiscal year 2017. Compared to this, there was a gain of $0.6 billion in the preceding fiscal, the central bank pointed out.The RBI said that at the end of March 2017, the import cover decreased to 11.3 months from 12 months at end-September 2016. “The ratio of short-term debt to foreign exchange reserves, which was 21.8% at end-September 2016, increased to 23.8% at end-March 2017.
The ratio of volatile capital flows (defined to include cumulative portfolio inflows and outstanding short-term debt) to reserves increased from 85.8% at end-September 2016 to 88.1% at end-March 2017,” the report stated. As at end-March 2017, out of the total foreign currency assets of $346.32 billion, $212.9 billion was invested in securities, $107.22 billion was deposited with other central banks, the BIS and the International Monetary Fund (IMF) and remaining $26.2 billion comprised deposits with overseas branches of commercial banks. “The Reserve Bank holds 557.77 tonnes of gold; of which, 265.49 tonnes are held overseas in safe custody with the Bank of England and the Bank for International Settlements (BIS),” the regulator said in its report. The RBI has the mandate to invest up to $5 billion in the bonds issued by the India Infrastructure Finance Company (UK) and as at end-March 2017, the amount invested in such bonds stood at $2.1 billion.