Forex reserves drop $4.6 bn, money supply growth dips

Written by feBureau | Mumbai | Updated: Feb 1 2009, 03:50am hrs
The county's foreign-exchange reserves dropped $4.6 billion to $247.6 billion in the week ended January 23, the Reserve Bank of India (RBI) said in its weekly statistical statement, on Friday.

Foreign-currency assets declined by $4.5 billion to $238.3 billion, while the nation's gold reserves were unchanged at $8.49 billion, the central bank said.

India's special drawing rights with the International Monetary Fund were unchanged at $3 million, while its reserves with the IMF were down $15 million to $828 million.

The change in foreign-currency assets is partly because of changes in the value of the dollar against the euro, yen and other currencies during the period, the central bank said.

India's foreign-exchange reserves declined $40.7 billion in the past year, the bank said. The reserves comprise overseas currencies, gold and special drawing rights with the IMF.

Meanwhile, bank loans fell by Rs 138.4 billion in the two weeks ended January 16, raising outstanding advances to Rs 26.5 trillion, according to the central bank.

Loans to industry and consumers declined by Rs 89.1 billion during the period, while food credit dropped Rs 49.2 billion, the RBI said.

Credit rose by 22.1%, or by Rs 4, 79,597 crore, in the 12 months through January 16. Total bank deposits rose by 20%, or Rs 6, 05,816 crore, in the same period to Rs 36, 30,079 crore.

Money supply in India grew 18.7% in the two weeks ended January 16 from a year earlier, compared with 19.6% in the prior two weeks, the central bank said.

M3, which mainly comprises currency in public circulation, bank deposits and money invested in other saving plans, stood at Rs 45,14,800 crore on January 16, the RBI said.