Forex kitty falls to $298 bn on foreign currency assets decline

MUMBAI: India’s foreign exchange reserves fell to $297.985 billion as on November 12 from $298.315 billion in the previous week, the Reserve Bank of India said in its weekly statistical supplement (WSS) on Friday.

According to data released by the central bank, the fall in reserves was largely because of a decline in foreign currency assets, which fell by $319 million. There was also a $8 million decline in the value of special drawing rights with the International Monetary Fund. The value of gold remained unchanged at $21.66 billion.

Changes in foreign currency assets, expressed in dollar terms, include the effect of appreciation or depreciation of other currencies held in its reserves like the euro, sterling and yen, RBI said.

Foreign exchange reserves include India’s reserve tranche position in the International Monetary Fund ( IMF), the central bank said. According to the weekly statistical supplement, bank deposits declined by `65,027 crore to `48,10,227 crore during the fortnight ended November 5.

The decline was entirely because of withdrawal from demand deposits (current and savings accounts), which saw withdrawals of `74,617 crore. Term deposits saw an increase of `9,590 crore. With liquidity turning tight, bank investment in government securities declined by around `15,000 crore to Rs 14,81,986 crore.

The fortnight also saw a sharp pick-up in bank credit, which rose Rs 54,658 crore to Rs 35,350,790 crore.