Money supply grew at the slowest pace since May, during the two weeks ended August 17, central bank data showed.
The M3 measure of money supply increased 20% in those two weeks from a year earlier, compared with 21.7% in the previous two weeks, the Reserve Bank of India said, in a statement in Mumbai. This is the slowest since the two weeks ended May 25.
M3, which mainly comprises currency in public circulation, bank deposits, and money invested in other saving plans, stood at Rs 34,600 crore ($844 billion) on August 17.
The measure has risen at an average rate of 21% since April 1, when the current fiscal year began. This is more than the 17% to 17.5% M3 growth, targeted by the Reserve Bank of India for this fiscal year.
Buoyed by strong inflows, the country?s foreign exchange reserves for the week ended August 24, 2007, increased by $2.404 billion to end at $ 228.849 billion from $226.445 billion a week ago, shows the weekly statistical supplement (WSS) from the Reserve Bank of India (RBI). The increase in the forex reserves has happened, mainly on account of the substantial rise in foreign currency assets (FCAs) held by the RBI.
For the week ended August 24, the FCA component of the forex reserves rose by $2.402 billion to $221.505 billion as against $219.103 billion in the previous week.
The reserve position in the International Monetary Fund (IMF) also increased marginally, by $2 million to $455 million. The special drawing rights and gold component of the forex reserve remained unchanged at $2 million and $6.887 billion respectively.
The WSS further showed that, for the fortnight ended August 17, 2007, the scheduled commercial banks? (SCBs) total deposit base decreased by Rs 25,658 crore (0.9%) to Rs 27,43,137 crore from Rs 27,68,796 crore, a fortnight ago.