Financial Daily from THE HINDU group of publications
Sunday, Jun 29, 2003
Financial Daily from THE HINDU group of publications Sunday, Jun 29, 2003 |
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RBI & Other Central Banks Money & Banking - RBI & Other Central Banks Industry & Economy - Economy India turns creditor to IMF — Finds place in financial transaction plan Our Bureau
MUMBAI, June 28 INDIA, a traditional borrower from IMF, has now become a lender to the multilateral institution. India has contributed $291.70 million to the International Monetary Fund in two tranches in May and June. "India has now become a creditor the IMF," the Reserve Bank of India today said. According to the RBI, India has been selected by IMF to become a member of its Financial Transaction Plan (FTP) from the quarter September-November 2002. Countries with strong balance of payments and foreign exchange reserves position are selected to contribute to the FTP, to help IMF finance the BoP needs of other countries, said an RBI press release. "Selection of India as a member of the FTP, for the first time by IMF, sends strong signals regarding the country's strength and resilience of its external sector to the international community," the RBI said. India has now become a creditor to the IMF, with its subscription to FTP so far being special drawing rights (SDR) of 205 million. The first transfer of SDR 5 million under India's participation in FTP was effected on May 7, 2003. The second transfer of SDR 200 million was effected on June 17. To effect these transfers of SDR 5 million and SDR 200 million to the IMF, the Government of India bought equivalent foreign exchange ($6.96 million and $284.21 million) from the RBI on those dates from its foreign currency reserves. Foreign assets held in the form of Reserve Tranche Position (RTP) are similar to other components of foreign exchange reserves and are given a rate of return by the IMF. They can also be used by India, when required, to deal with any balance of payments needs entirely at India's discretion. The weekly statistical figures released by the RBI shows an increase in India's FTP by $291.17 million. An equivalent amount has been drawn from the foreign currency assets (FCA), which is also reflected in the figures of the current week.
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