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Forex reserves rise to $ 38 billion

The turnaround in export growth and portfolio investment is reflected in the country's foreign exchange reserves, with the total foreign exchange reserves as on March 31 reaching $ 38 billion, says the Reserve Bank of India. This is the equivalent of around eight months of imports.

According to figures released by the RBI in a statement issued with the Monetary and Credit Policy for 2000-2001, the foreign currency assets of the RBI increased to $ 35.1 billion as on March 31.

The value of monetary gold increased marginally by $ 14 million to $ 3 billion over the same period.

Forward liabilities at $ 0.7 billion as on March 31 worked out to less than 2 per cent of the outstanding foreign currency assets, reflecting conscious policy of the RBI to contain such liabilities at a manageable level in relation to the size of reserves.

The export recorded a growth of 11.1 per cent during 1999-2000 -- up to February 2000 -- in sharp contrast to a decline of 1.9 per cent during the corresponding period of 1998-99, largely on account of a recovery in manufactured goods' exports.

Exports showed a sustained increase from the beginning of the year breaking the declining trend witnessed in the previous year.

Export growth, after reaching the peak of 30.7 per cent in November 1999, decelerated in December 1999, turned negative in January 2000, and then recovered to 9.7 per cent in February 2000.

According to the RBI, the current account deficit at $ 4.1 billion during 1999-2000 -- up to December 1995 -- was marginally lower than that of $ 4.3 billion during the corresponding period of 1998-99.

The net invisible surplus at $ 7.2 billion during April-December 1999 was the same as that during the corresponding period of last year.

Higher miscellaneous invisible payments were compensated by a 17.0 per cent increase in private transfers to $ 8.9 billion and a 58.7 per cent surge in software exports to $ 2.9 billion.

Capital flows, led by portfolio inflows and non-resident deposits, continue to remain strong, enabling the build-up of reserves, foreign investment inflows during 1999-2000 -- up to February 2000 -- at $ 4.4 billion were significantly higher than that of $ 1.6 billion in the corresponding period of 1998-99 on account of higher portfolio inflows.

Foreign institutional investor, or FII, inflows amounted to $ 1.8 billion during 1999-2000 -- up to February 2000 -- in contrast to an outflow of $ 0.6 billion during the comparable period of the previous year.

Similarly, the resources raised under global depository receipts, or GDRs, and American depository receipts, or ADRs, increased to $ 0.6 billion during the corresponding period of the previous year.

Direct investment inflows during 99-00 - up to February 2000 -- stood at $ 1.9 billion, but were lower under external commercial borrowings, or ECBs, at $ 2.2 billion during 99-00 -- up to December 1999 -- were almost the same as in the corresponding period of 1998.

The demand for ECBs notwithstanding the decline in average six-month forward premiums from 8.2 per cent during April-December 1998 to 5.2 per cent during April-December 1999, was sluggish partly reflecting the attractiveness of borrowing from domestic sources.

Inflows under Non-Resident Indian, or NRI, deposits during 1999-2000 - up to February 2000 -- at $ 2.0 billion were significantly higher than that of $ 1.3 billion in the corresponding period of 1998-99.

The proportion of FCNR(B) deposits (foreign currency non resident Indian - banking deposits) swapped into rupees continued to be within reasonable limits, the RBI stated.

UNI

ALSO SEE

RBI Governor Bimal Jalan's policy statement

RBI's Credit and Monetary Policy 2000-2001

RBI's Credit and Monetary Policy 1999-2000

RBI's Credit and Monetary Policy 1998-1999

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