Forex reserves jump $1.8 b to touch $232 b
Strong FIIS help Foreign exchange reserves touch $1.8 billion during the week ended on Sep 14.
By TNN |
MUMBAI: Foreign exchange reserves rose $1.8 billion during the week ended on September 14, on account of strong FII inflows mopped up by the central bank.
According to the latest figures released by the Reserve Bank of India (RBI) in its weekly statistical supplement (WSS), total foreign exchange reserves including gold and SDR rose $1,808 million to $232.2 billion during the week ended on September 14. Almost the entire growth in the reserves has been on account of a rise in foreign currency assets.
While foreign currency assets rose $1808 million, the reserve tranche position with the IMF rose $2 million. The level of gold and SDR in reserves remained unchanged during the week.
The forex mop up has resulted in a release of rupee funds worth Rs1,511 crore during the week. The central bank has mopped up $55 billion forex assets from the market to add to the country’s forex kitty. This in turn has resulted in a corresponding release of rupee funds worth Rs 1,55,568 crore.
A large mop up of forex inflows has added challenges to liquidity management for the central bank. This is because, forex inflows, when mopped up ends up releasing in rupee funds in the system. This adds to the stock of money in the system.
If not matched by a corresponding growth in goods and services, it adds to the inflationary pressures in the economy. To contain the monetary impact of inflows, the central bank has, of late, resorted to hiking the cash reserve ratio —asking banks to park higher amount of deposits mobilised with it.
In the other developments reported in the WSS, the Centre has refrained from resorting to any overdraft in the form of ways and means advances (WMAs) from the central bank for yet another week. State governments, on the other hand, have continued their reliance on the RBI support to meet their temporary revenue mismatches. As of September 14, outstanding WMAs of state governments amounted to Rs 1,864 crore, down Rs 999 crore over their previous week’s outstandings.
According to the latest figures released by the Reserve Bank of India (RBI) in its weekly statistical supplement (WSS), total foreign exchange reserves including gold and SDR rose $1,808 million to $232.2 billion during the week ended on September 14. Almost the entire growth in the reserves has been on account of a rise in foreign currency assets.
While foreign currency assets rose $1808 million, the reserve tranche position with the IMF rose $2 million. The level of gold and SDR in reserves remained unchanged during the week.
The forex mop up has resulted in a release of rupee funds worth Rs1,511 crore during the week. The central bank has mopped up $55 billion forex assets from the market to add to the country’s forex kitty. This in turn has resulted in a corresponding release of rupee funds worth Rs 1,55,568 crore.
A large mop up of forex inflows has added challenges to liquidity management for the central bank. This is because, forex inflows, when mopped up ends up releasing in rupee funds in the system. This adds to the stock of money in the system.
If not matched by a corresponding growth in goods and services, it adds to the inflationary pressures in the economy. To contain the monetary impact of inflows, the central bank has, of late, resorted to hiking the cash reserve ratio —asking banks to park higher amount of deposits mobilised with it.
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In the other developments reported in the WSS, the Centre has refrained from resorting to any overdraft in the form of ways and means advances (WMAs) from the central bank for yet another week. State governments, on the other hand, have continued their reliance on the RBI support to meet their temporary revenue mismatches. As of September 14, outstanding WMAs of state governments amounted to Rs 1,864 crore, down Rs 999 crore over their previous week’s outstandings.
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