Mumbai, July 4: The country's foreign exchange reserves have been eroded by $1.2 billion in June. With this the country's reserves have fallen by over $2 billion out of which forex assets alone have dipped by $1.8 billion in the first three months of the current financial year.The erosion has taken place primarily because of a $208 million outflow in June by foreign institutional investors and the revaluation of the non-US currencies held in reserve by the RBI. The revaluation is primarily because of the fall in the yen's value against the dollar.
In the Weekly Statistical Supplement issued by the Reserve Bank on Saturday, the foreign currency reserves have dipped by $258 million during the week ended June 26. The reason for the fall in the reserves is because of a $219 million fall in the foreign currency assets of the central bank during the same period.
While the gold reserves have remained unchanged, the SDRs have fallen by $39 million on June 26. Sources said that this was on account of repaymentsdue to the International Monetary Fund. About $600 million is outstanding as on December, 1998, to the IMF, analysts say.
The recourse to ways and means by the government has fallen because of the "on tap" issue which raised Rs 5,031 crore and another inflow of Rs 2,353 crore on account of corporate taxes. The centre's recourse to the WMA was at Rs 6,053 crore on June 19 - down from Rs 10,986 crore in the previous week.
Analysts say the next week's recourse is also likely to show a downward trend as the government raised another Rs 5,500 crore through the floatation of three government securities on July 1.
The government has a limit of Rs 11,000 crore in the first half of the fiscal under the WMA, but it has to trigger off a fresh floatation in the market as soon as 75 per cent of the limit is touched.
Bank credit continues to fall, and for the fortnight ended June 19, it fell by Rs 1,494 crore. The fall is primarily because of the fall in the non-food credit which has fallen by Rs 1,933 crore.Analysts said that there is nothing wrong in the dip as credit is not supposed to pick up in the slack season. Deposits continue to grow rampantly. Aggregate deposits have gone up by Rs 2,230 crore during the fortnight ended June 19.
The growth in the time deposits can be considered the reason for the rise in the deposits. These deposits grew by Rs 1,913 crore during the fortnight ended June 19.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
