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Our Bureau

Mumbai, Dec. 5 The foreign exchange reserves swelled by $1.88 billion in the week ended November 28, to $247.68 billion.

If one reckons the position obtaining as of December-end 2007, the forex reserves have, in fact, got depleted by $27.63 billion.

The Reserve Bank of India’s data clearly indicate that in the April-September 2008 period foreign direct investments increased substantially by $19.295 billion (as against $7.250 billion in the corresponding period last year), portfolio investments saw an outflow of $5.480 billion (as against an inflow of $18.409 billion in the corresponding period last year).

According to the central bank, foreign currency assets expressed in dollar terms include the effect of appreciation and depreciation of non-US currencies (such as euro, sterling, yen) held in reserves.

A forex dealer with a public sector bank said: “Forex reserves in the reporting week would have gone up on account of revaluation gains, i.e. other currencies appreciating against the dollar.”

Credit extended by scheduled commercial banks, in the fortnight ended November 21, has declined by Rs 2,193 crore.

“We reckon that the dip in bank credit is only temporary, reflecting the disruption on account of credit crunch in the reporting period. The situation is expected to get normalised in the next reporting fortnight. Overall, we expect credit to grow in the 20 to 23 per cent band in FY09,” said Dr Shubhada Rao, Chief Economist, YES Bank.

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