Foreign currency assets reserves rise to US$ 263.73 billion
Foreign exchange reserves rose to US$ 291.30 billion as on 29 November 2013, their highest level to over six-month high. Huge dollar inflows increased the foreign exchange reserves by US$5 billion in the week ended 29 November 2013.When the Rupee started depreciating on global liquidity concern since May, the domestic forex reserves moved southward. This made the RBI intervene by selling dollars in the market and also providing foreign exchange directly to oil importers. However, in turn, this raised fear of India's forex reserve cover depleting and further added to the depreciating rupee. During April-September, the rupee had collapsed 15% and had hit an all-time low of Rs 68.8 a dollar in August.
Over the three-month period the reserves have surged by $16.5 billion from US $274.81 billion on 06 September to US$291.30 billion on 29 November 2013. Reserves in rupee terms increased to Rs 18154.7 billion as on 29 November 2013. As of week ended 29 November, foreign currency assets reserves rose by US$5 billion to US$ 263.73 billion.
The new RBI governor immediately after taking charge announced special subsidised window for swapping foreign currency non-resident (banks) deposits and overseas foreign currency borrowings to attract dollar demand and prevent rupee's free fall against the dollar.
Further, the banks were allowed to swap fresh FCNR(B) deposits, mobilised with a minimum three years maturity and having a lock in period of one year, at a fixed rate of 3.5% for the tenor of the swap. It relaxed banks overseas borrowing norms and allowed them to raise capital abroad to the tune of 100 per cent of their paid-up equity capital.
RBI has also allowed banks to raise interest rates on NRI deposits to attract dollars. NRI pumped in dollar in deposits schemes in India to make most of the interest rate difference and rupee depreciation. While the gold reserves increased to US$21.227 billion in a month to 29 November 2013.
Recently, the RBI has extended the deregulated interest rate scheme for non-resident-external (NRE) deposits till 31 January 2014 from the earlier 30 November 2013, in order to attract more dollar inflows.
The deregulated interest rate scheme on NRE rupee deposits will remain unchanged until 31 January 2014, subject to review, the RBI said in a notification. Also banks will continue to get exemption provided on such deposits from CRR and SLR requirements during this period, added the central bank in the notification.
Accordingly, the apex bank has also extended the interest rate ceiling on FCNR-B deposits for maturity period of one year to less than three years and three to five years, respectively to 31 January 2014.
Foreign Exchange ReservesItem As on November 29, 2013 Variation overWeek End-March 2013 YearRs Bn. US$ Mn. Rs Bn. US$ Mn. Rs Bn. US$ Mn. Rs Bn. US$ Mn.Total Reserves 18,154.7 2,91,300.9 147.6 5,037.2 2,270.5 -745.3 2,096.2 -3,208.8Foreign Currency Assets 16,455.7 2,63,735.9 153.7 5,071.2 2,329.4 4,010.0 2,278.2 3,723.4Gold 1,303.6 21,227.3 - - -93.8 -4,464.7 -212.4 -6,575.8SDRs 276.6 4,432.9 -2.0 12.2 41.2 105.3 35.1 3.2Reserve Position in the IMF 118.8 1,904.8 -4.1 -46.2 -6.3 -395.9 -4.7 -359.6Powered by Capital Market - Live News
