Net bank credit to the government has grown from Rs 1,23,463 at the end of the last financial year to Rs 2,94,956 crore, an increase of 3.7 per cent.
Of this, the increase in net RBI credit to the government went up by Rs 8,340 crore to touch Rs 1,23,463 crore. This led to an increase in the money supply (M3) by 1.7 per cent. As on April 11, M3 stood at Rs 7,10,783 crore.
The growth in the reserve money during the week-ended April 18 was only Rs 951 crore, an increase of 0.5 per cent. Reserve money as on April 18 stood at Rs 2,05,433 crore with currency in circulation at Rs 1,44.065 crore.
Aggregate deposits of the banking system grew by 1.1 per cent in the first fortnight of the financial year to touch Rs 5,08,991 crore. While demand deposits fell by Rs 1,277 crore time deposits went up by Rs 6,673 crore.
Bank credit also grew at a similar rate to Rs 2,79,370 crore. While food credit declined by Rs 582 crore, non-food credit grew by Rs 3,422 crore to Rs 2,72,355.
No significant off-take is expected in the immediate future also because of the fact the demand for credit is generally very low in the first half of a financial year.
Bank investments in government and other approved securities stood at Rs 1,93,098 crore. As on April 11 the investment-deposit ratio and the credit-deposit ratio stood at 37.94 per cent and 54.89 per cent respectively.
The total stock of foreign exchange reserves grew by $189 million to stand at $26,754 million on April 25.
Contributing to this increase was the rise in the stock of special drawing rights (SDR) with the RBI. The stock of SDR held by the apex bank has gone up from $2 million to $25 million.
The RBI has reportedly bought SDRs by paying the corresponding amount in dollars. Inspite of this there has been an increase in the foreign currency assets by $164 million.
One possible reason for Reserve Bank having bought SDRs is to provide for payment of rate of charge, i.e. the interest payments to the International Monetary Fund.
While the repayment of loans can made even in dollars, the rate of charge can be paid only in the form of SDRs.
On the interest rate front, the yields on 91-day treasury bills have remained unchanged at 6.23 per cent while that on 364-day treasury bills are unchanged at 8.98 per cent.
With calls ruling high the interest in 364-day treasury bills has declined with the RBI accepting only bids worth Rs 35 crore at last week's auction.
Among other short-term instruments, the quantum of commercial paper issued by the companies stood at Rs 702 crore against Rs 646 crore at the end of the last financial year.
The quantum of treasury bills held by the Resesrve Bank declined by Rs 292 crore to Rs 1,177 in comparison to the year-end figure.
The quantum of treasury bills held by the banks and other entities increased during the corresponding period.
