The Hindu Business Line : Import cover of forex reserves at 17 months

THE Reserve Bank of India's investments in international securities increased to $35.02 billion for the financial year ended March 31, 2004, from $ 26.92 billion in the previous fiscal year.

In its report on Foreign Exchange Reserves 2003-04, the apex bank disclosed that during this period, it deposited $45.9 billion with other central banks and the Bank for International Settlements and $26.5 billion in the form of deposits with foreign commercial banks.

RBI has said the foreign exchange reserves are invested in multi-currency, multi-market portfolios as per the existing norms, which are similar to international practices.

For the period 2003-04, the apex bank has said, the ratio of short-term to the reserves declined to 4.2 per cent as on March 2004, from 6.1 per cent in March 2003.

The ratio of volatile capital flows-including cumulative portfolio inflows and short-term debt- to reserves declined to 36.0 per cent as at end-March 2004, from 146.6 per cent as at end-March 1991.

The significant increase in forex reserves enabled prepayment of certain high-cost foreign currency loans of the government from the Asian Development Bank and the World Bank (IBRD) amounting to $3.03 billion in February 2003. During 2003-04, prepayment of certain high cost loans to IBRD and ADB amounting to $2.6 billion was carried out by the Government.

Additionally, prepayment of bilateral loans amounting to $1.1 million was made taking total quantum of prepayments to $3.7 billion in 2003-04, the report observes.

The import cover of foreign exchange reserves as at end-March 2004 increased to 17 months, from 14 months of imports or about five years of debt servicing as at end-March 2003 and 11.3 months in March 2002, and 3 weeks of imports as at December 1990.

RBI has said that the increase in foreign exchange reserves in the recent period has been on account of capital and other inflows. Major sources of increase in foreign exchange reserves have been: (a) Foreign investment (b) Banking capital (c) Short-term credit (d) Other items under capital account, and (e) Valuation changes in reserves.

More Stories on : Forex | Exports & Imports

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Bank loans, food for work: Cut the cackle

UTI Securities completes 10 yrs

Raise exemption limit to Rs 40,000 says IRDA — I-T sops for pension investments urged

Rupee up 5 paise; securities rise

Import cover of forex reserves at 17 months

Tech lab to train bankers

Pvt bank stocks down on RBI draft guidelines

ICICI Bank awaits RBI norms to decide on stake cut

Dr Kotaiah quits GTB board

Credit disbursement in Thiruvananthapuram dist

SBI staff federation call for protest

High-level probe into APCOB

Central Bank transfers