The decrease was due in part to a drop in holdings of foreign currency, which fell by $40 million to $30.573 billion in the week.

Factors that affect these reserves include interest payments on multilateral loans, revaluation of foreign currency assets and intervention by the Reserve Bank of India in the foreign exchange market by selling or buying dollars.

Total foreign exchange reserves were higher by $ 4.95 billion from the same week in 1998, while foreign currency holdings were up by $5.363 billion, the statement said.

The Government's borrowings under the Ways and Means Advances account rose to Rs 45.06 billion for the week ended May 28. This indicates that the Centre's borrowing under this route was within its limit of Rs 82.50 billion.The Government's withdrawals under this route was at Rs 35.25 billion for the previous week ended May 21, and increased by Rs 9.81 billion during the week.

The Ways and Means Advances is a withdrawal facility provided by the Reserve Bank to the government to meet temporary mismatches in their cash flows. Under the agreement between teh Reserve Bank and the Government, if Ways and Means Advances rise beyond Rs 82.50 billion (75% of the total limit of Rs 110 billion), the government must make a fresh issue of securities to repay the account.