The Hindu Business Line : Forex reserves rise by over $1 b

Mumbai, May 23 The country’s foreign exchange reserves increased by $1.381 billion to touch $314.081 billion for the week ended May 16, 2008, according to the RBI’s Weekly Statistical Supplement.

This is the second week in a row that forex reserves have increased. In the previous week, the reserves had increased by $200 million to $312.7 billion.

During the week under review, foreign currency assets increased by $1.342 billion to $304.118 billion, primarily due to a currency revaluation effect. The dollar was steady to weak, against the euro, during that week.

Foreign currency assets expressed in dollar terms include the effect of appreciation or depreciation of non-US currencies (such as euro, sterling, yen) held in reserves.

Gold was unchanged at $9.427 billion. SDRs fell by $7 million to $11 million. The country’s reserve position in the IMF increased by $46 million to $525 million.

According to a forex dealer, the rupee may not breach 43 levels next week. The RBI may sell dollars in the rupee market, mainly with a view to contain the volatility, the dealer said.

Bank credit

After declining in the first month of the financial year 2008-09, net bank credit increased by Rs 17,590 crore to Rs 23,46,656 core for the fortnight ended May 9, 2008. This includes food credit, which increased by Rs 9,018 to touch Rs 50,042 crore, and non-food credit which increased by Rs 8,572 crore to touch Rs 22,96,614 crore.

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