Sources of Accretion to Foreign Exchange Reserves in India: 2006-07 - આરબીઆઈ - Reserve Bank of India
Sources of Accretion to Foreign Exchange Reserves in India: 2006-07
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 year 2006-07 are now available. These data have been released on RBI website (www.rbi.org.in) on June 29, 2007. On the basis of these data, sources of accretion to foreign exchange reserves have been compiled.
Sources of Accretion to Foreign Exchange Reserves 2006-07
The main components of accretion to foreign exchange reserves during fiscal 2006-07 are set out in the Table.
Table : Sources of Accretion to Foreign Exchange Reserves |
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(US $ billion) |
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Items |
April-March |
April-March |
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I. |
Current Account Balance |
-9.6 |
-9.2 |
|
II. |
Capital Account (net) (a to f) |
46.2 |
24.3 |
|
a. |
Foreign Investment |
15.5 |
17.2 |
|
b. |
Banking Capital |
2.1 |
1.4 |
|
of which: NRI Deposits |
3.9 |
2.8 |
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c. |
Short-term credit |
3.3 |
1.7 |
|
d. |
External Assistance |
1.7 |
1.7 |
|
e. |
External Commercial Borrowings |
16.1 |
2.7# |
|
f. |
Other items in capital account* |
7.5* |
-0.4 |
|
III. |
Valuation change |
10.9 |
-5.0 |
|
Total (I+II+III) |
47.5 |
10.1 |
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# Including the impact of IMD redemptions amounting to US $ 5.5 billion. |
Major sources of accretion to foreign exchange reserves during the year 2006-07 have been External Commercial Borrowings (ECBs), foreign investment and short-term credit. The accretion to the foreign exchange reserves was of the order of US $ 36.6 billion on a BoP basis (excluding valuation effects) during 2006-07. Valuation gain, reflecting the appreciation of major currencies against the US dollar, accounted for an increase of US $ 10.9 billion in total reserves during 2006-07 as against a valuation loss of US $ 5.0 billion during 2005-06. Taking into account the valuation gain of US $ 10.9 billion, foreign exchange reserves recorded an increase of US $ 47.5 billion during 2006-07 (an increase of US $ 10.1 billion during 2005-06).
G. Raghuraj
Deputy General Manager
Press Release : 2006-2007/1817