Forex reserves down $1.8 bn

MUMBAI: Bank credit has been showing signs of a gradual pick up over the past few fortnights. Data released by the Reserve Bank of India (RBI) in its weekly statistical supplement (WSS) show that bank-credit growth has risen to 22.8%. This figure has progressively risen over the past few weeks, from 21.5% in the second week of January this year. At current levels, the year-on-year bank credit stands at Rs 4.09 lakh crore.

Outstanding bank loans touched Rs 22,07,312 crore on February 1, up Rs 40,465 crore, from the previous fortnight���s levels. While food credit rose Rs 2,009 crore, non-food credit moved up Rs 38,456 crore during the fortnight. Simultaneously, outstanding deposits with commercial banks touched Rs 30,89,540 crore as on February 1, rising Rs 58,899 crore over the previous fortnight���s levels. While demand deposits rose Rs 57,794 crore, term deposits with commercial banks rose Rs 1,106 crore. Investments in government and other approved securities by banks dropped to Rs 9,50,589 crore as on February 1, down Rs 7,908 crore from the previous fortnight���s levels.

Also, depreciation of the rupee over the past few weeks has led to a dip in the country���s foreign currency reserves. According to the WSS, total foreign exchange reserves in the system dipped by $1.8 billion during the week ended February 8 to settle at $ 281.1 billion. Total reserves dipped by a similar amount to end the week at $290.8 billion. The foreign currency assets are expressed in dollars, but include the effect of appreciation or depreciation of other currencies held in the reserves such as the euro, pound and yen. The reserve position with the IMF also dipped by $6 million to $417 million.

The total stock of money in the system went up Rs 49,736 crore during the fortnight ended February 1 to touch Rs 38,56,841 crore. All components of money supply ��� currency, term deposits as well as demand deposits ��� recorded a strong growth during the fortnight. At the current levels, the annual year-on-year growth in money supply was at 23.9% compared with 23.8% of the previous fortnight.

The money supply growth is still way above the central bank���s comfort levels of 17-17.5%. In other developments reported in the WSS, the Centre has refrained from resorting to ways and means advances (WMA) ��� a temporary overdraft to meet its revenue mismatches. State governments on the other hand, borrowed Rs 324 crore from the central bank during the week ended February 8.