Forex kitty up $899 m, touches $285 bn

MUMBAI: Foreign exchange reserves rose $899 million to touch $285.1 billion during the week ended January 15, largely on account of revaluation of non-dollar assets in reserves.

The latest figures released by the Reserve Bank of India (RBI) on Friday indicate that the total foreign exchange reserves comprising foreign currency assets, gold and special drawing rights (SDR — reserves currency with the International Monetary Fund) rose $853 million reflecting valuation gains in non-dollar assets. The value of SDR and the reserve capital with the IMF rose $36 million and $10 million, respectively, during the week.

“The dollar had strengthened sharply against the euro during the week. As a result, the value of euro-denominated assets in reserves, which are expressed in dollars, have risen,”said a treasury official with a private bank, requesting anonymity. Almost 40% of the reserves are believed to be comprised in non-dollar assets, including the sterling pound, yen, euro and the yuan, though central banks don’t make their currency composition of reserves public.

In other developments, the central government has kept its respective ways and means advances (WMA) account with RBI vacant during the week ended January 8. WMA is a facility under which governments (states as well as the Centre) can borrow from the central bank to meet their daily revenue mismatches. While borrowing within the limit is at the prevailing repo rate, borrowings above the agreed limit — between the government and RBI — is at 2% higher than the repo rate.

State governments availed of Rs 72 crore higher during the week under this facility, taking their outstanding
WMA balances to Rs 75 crore as on January 15.