Balance of payments (BoP) data for the quarter April-June 2004-05 are now available. These data have been released on RBI website on September 30, 2004.

The following table shows the main components of accretion to foreign exchange reserves during April-June 2004-05:

(US $ billion)

Major sources of accretion to foreign exchange reserves during April-June, 2004-05 have been:

• The current account surplus amounting to US $ 1.9 billion during April-June 2004 as compared with a deficit of US $ 0.6 billion during April-June 2003.

• Foreign investment (20.0 per cent); comprising FDI (18.5 per cent) and portfolio investment (1.5 per cent);
• Banking capital, (which includes NRI deposits) at 16.9 per cent;
• Short-term credit (24.6 per cent);
• Other items under capital account which mainly reflect the difference between customs data on imports/exports and banking channel data (US $ 2.4 billion), external assistance (US $ 72 million), rupee debt service (US $ -277 million) and other transactions, accounted for 4.6 per cent;
• Valuation loss in reserves of US $ 1.0 billion (15.4 per cent).

Valuation changes, reflecting the depreciation of the Euro, GBP and Yen against the US dollar, accounted for a decline of US $ 1.0 billion in the total reserves during April-June 2004-05 as against a valuation gain of US $ 1.6 billion in the corresponding period of 2003-04. While the Reserve Bank denominates its forex reserves in terms of US dollars, these comprise a basket of major international currencies, particularly US dollar, Euro and Pound Sterling. Accordingly, when non-US dollar currencies appreciate vis-à-vis the US dollar, there is an accretion to reserves by way of valuation gains. The reverse is the case when these currencies depreciate against the US dollar.