The Hindu Business Line : Foreign investment pumped up reserves

Mumbai, June 30 Foreign investment was the biggest source of accretion to India’s foreign exchange reserves in 2007-08 at $44.8 billion, against $15.6 billion in the previous year.

Under foreign investment, portfolio investments pumped in $29.3 billion against $7.1 billion in the previous year while FDI brought in $15.5 billion, up from $8.5 billion.

According to the RBI, the accretion to the foreign exchange reserves was $ 92.2 billion on a balance of payment basis (excluding valuation effects) during the recently concluded fiscal.

Valuation gain, which reflects the appreciation of major currencies against the US dollar, accounted for $ 18.3 billion in total reserves during 2007-08 as against a valuation gain of $ 11 billion during the corresponding period of previous year.

The foreign exchange reserves have increased by an amount of $ 110.5 billion during the same period, if valuation effects are included, against an increase of $ 47.6 billion last year.

Other major sources of accretion to the forex reserves during the first quarter include External Commercial Borrowings at $22.2 billion ($16.2 billion), banking capital including NRI deposits at $11.8 billion ($1.9 billion) and short term credit at $17.7 billion ($6.6 billion).

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