MUMBAI, March 30: The central bank's foreign exchange reserves, including gold and SDRs, pierced the $28-billion mark on the back of a $470-million growth in foreign currency assets during the week ended March 20.This is for the first time since turmoil engulfed the country's forex market that the reserves touched $28.27 billion. The forex reserves, which peaked at $30.23 billion in August 1997, showed a steady erosion since then, triggered by RBI's continuous interventions in the spot and forex markets. In November 1997, forex reserves slipped to $27.89 billion and since then they have not been able to pierce the $28-billion mark.
The centre's borrowings through ways and means advances (WMA) grew by Rs 8 crore during the week ended March 13, 1998. The WMA, which stood at Rs 5,225 crore on March 6, 1998, grew to Rs 5,233 crore. Under the agreement signed in March, 1997, while the WMA limit for the first-half of the current fiscal was fixed at Rs 10,000 crore, the second-half limit was fixed at Rs 8,000crore. If the WMA exceeds 75 per cent of the limit, new securities will have to be floated.
The government reportedly crossed this limit during the week ended March 20, 1998 which made them place securities worth Rs 6,000 crore with the RBI. The tranche consists of two securities: the 11.57 per cent 2004, worth Rs 4,000 crore and the 12.15 per cent 2008, worth Rs 2,000 crore. The current market yield on six-year securities is around 11.56 per cent, while that on 10-year securities is around 12.04 per cent.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
