M3 up 20.20%, bank loans rise, forex reserves dip: RBI

May 25 | Updated: May 26 2007, 05:43am hrs
Money supply grew faster during the two weeks ended May 11, compared with the previous similar period, the Reserve Bank of India (RBI) data Friday said. The M3, measure of money supply, increased 20.2% in the two weeks compared with 19.8% in the similar period to April 27.

M3, which mainly comprises currency in public circulation, bank deposits and money invested in other saving plans, stood at 33.33 lakh crore ($821 billion) on May 11.

Indian banks loans rose Rs 1504 crore ($370 million) in the two weeks ended May 11, taking outstanding advances to Rs 18.9 lakh crore, central bank data showed. Loans to industry and consumers increased Rs 3986 crore during the period, while food credit fell by Rs 24.82 crore, the RBI said in Mumbai.

Credit climbed 27.1%, or by Rs 4.03 lakh crore, in the 12 months through May 11. Total deposits rose by 22.5%, or Rs 4.8 lakh crore, in the same period to Rs 26.04 lakh crore. The RBI has raised its overnight lending rate seven times since October 2005 to cool credit growth that has averaged near the fastest in three decades.

Indias foreign-exchange reserves fell $9 million to $203.98 billion in the week ended May 18, the central bank said. Foreign-currency assets fell by $8 million to $196.49 billion while reserves with the International Monetary Fund declined by $1 million to $460 million, the RBI said.

The nations special drawing rights with the International Monetary Fund were unchanged at $1 million while gold reserves held at $7.04 billion in the week through May 18, the bank said. The change in foreign-currency assets is partly because of fluctuations in the value of the dollar against the euro, yen and other currencies during the period, the central bank said. foreign-exchange reserves rose by $41.02 billion in the past year, the bank said