Forex kitty swells $1.1bn to $167bn on FII inflows

MUMBAI: Foreign exchange reserves rose $1,132m to touch $166.6bn during the week ended September 1 mainly on account of strong FII inflows, according to the figures released by the RBI in its weekly statistical supplement (WSS).

While foreign currency assets went up by $1,152m, the value of gold in reserves and the reserve tranche position with the IMF dipped $19m and $1m, respectively. The value of SDR in reserves remained unchanged during the week in question.

In the debt market, interest rates on short-term instruments — certificate of deposits (CDs) and commercial paper (CP) — have marginally declined. As a result, corporates are increasingly opting for commercial paper (CP) to meet their working capital requirements. They raised Rs 4,018 crore during the fortnight ended August 15, taking the outstanding stock of CPs to Rs 22,764 crore. The interest rate on CPs marginally dropped to 6.25-8.1% as against 6.50-8.25% in the previous fortnight.

Bank sales of bulk deposits — known as certificate of deposits (CDs) — have touched a new high. They helped mop up Rs 7,139 crore during the fortnight ended August 4. Interest rates during the fortnight ranged between 6-8.62% as against 4.35- 8.21% in the previous fortnight. In other developments reported in the WSS, the Centre has refrained from resorting to WMA (ways and means advances).

However, the government has withdrawn the surplus funds worth Rs 6,791 crore parked with RBI. As on September 1, surplus funds parked with the central bank amounted to Rs 100 crore. The WMA balances for states, however, remained at Rs 487 crore, up Rs 316 crore over the previous week’s levels.