Stable Re stems IMD outflow

$5.5bn IMDs2000:46.652005:46.20 $4.2bn RIBs1998:42.762003:46.16 $1.8bn IDBs

1991: 26.00

1997:35.45  SBI is expected to pay around Rs 25,400 crore towards redeeming the principal amount of the IMDs, against Rs 25,662 crore it received on conversion of IMD proceeds at around Rs 46.65 a dollar.  The gain for SBI will be around Rs 250 crore if the market value of the rupee remains around the current level.  The government, the Reserve Bank of India and SBI had put in a mechanism for sharing the exchange loss on IMDs on the lines of the one put in place for the $4.2 billion RIBs issued in August 1998.  SBI and the government had also suffered an exchange loss when $1.8 billion of foreign currency resources were raised through an issue of IDBs to tide over the balance of payment crisis of 1991.  SBI is required to bear one per cent of the exchange loss on the $5.5-billion corpus mopped up through IMDs. The government had committed to bearing the exchange loss in excess of this.  However, none of the two was likely to be affected as the rupee is unlikely to fall below 46.65 over the next fortnight, foreign exchange dealers said.  SBI made its contributions to cover for exchange loss in 2001-02 and 2002-03, but did not make provisions in 2003-04 and 2004-05 as the rupee had appreciated from the November 2000 levels. The government has made a provision of just Rs 1 crore for exchange loss on IMDs in 2005-06, against provisions of Rs 208 crore in 2004-05 and Rs 423.90 crore in 2003-04.  The total outgo expected on December 29 is $7.1 billion, including $1.6 billion of interest. Some IMD holders had opted for half-yearly and yearly interest payments. In the case of RIBs, the total outgo was $6.0 billion, including the principal amount of $4.2 billion.