Background The Reserve Bank of India (RBI) had,
on January
31, 2003, issued a Press Note on conclusions of a study conducted by its Department
of Economic Analysis and Policy (DEAP) on Sources of Accretion to Foreign Exchange
Reserves during April-November 2002. Subsequent to this, the RBI has been regularly
updating and releasing information on ‘Sources of Accretion to Foreign Exchange
Reserves’ through press releases which are available on the RBI website
(www.rbi.org.in).
Balance
of payments (BoP) data for the period April-December 2006 are now available.
These data have been released on RBI website (www.rbi.org.in)
on March 30, 2007. Sources of Accretion to Foreign Exchange Reserves
April-December 2006 The following table shows the main components
of accretion to foreign exchange reserves during April-December 2006:
Table 1: Sources of Accretion to Foreign
Exchange Reserves(US $ billion) |
Items | April-December
2006 | April-December
2005 | I. | | Current
Account Balance | -11.8 | -11.9 |
II. | | Capital
Account (net) (a to f) | 28.0 | 13.7 |
| a. | Foreign
Investment | 11.0 | 11.5 |
| b. | Banking
Capital | 1.1 | 1.8 |
| | Of
which: NRI Deposits | 3.2 | 1.1 |
| c. | Short
term credit | 1.3 | 1.7 |
| d. | External
Assistance | 0.9 | 1.1 |
| e. | External
Commercial Borrowings | 9.1 | -1.2 |
| f. | Other
items in capital account | 4.6* | -1.2 |
III. | | Valuation
change | 9.4 | -6.1 |
| | Total
(I+II+III) | 25.6 | -4.3 |
* Mainly includes 'Other Capital' (comprising the leads and
lags in export receipts, funds held abroad, India's subscription to international
institutions, quota payments to IMF, remittances towards recouping the losses
of branches/subsidiaries and residual item of other capital transactions not included
elsewhere) of US $ 3.9 billion.
Major sources of accretion to foreign
exchange reserves during April-December 2006 have been foreign investment and
external commercial borrowing (ECB). The accretion to the foreign exchange reserves
was of the order of US $ 16.2 billion on BoP basis (excluding valuation effects)
during April-December 2006. Valuation gain, reflecting the appreciation of major
currencies against the US dollar, accounted for a rise of US $ 9.4 billion in
total reserves during April-December 2006 as against a valuation loss of US $
6.1 billion during corresponding period previous year. Taking into account the
valuation gain of US $ 9.4 billion, foreign exchange reserves recorded an increase
of US $ 25.6 billion during April-December 2006-07 (a decline of US $ 4.3 billion
during April-December 2005-06). Alpana
Killawala
Chief General Manager Press
Release : 2006-2007/1323 |