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Forex reserves at all time high of $64 bn: Jalan

Rediff Money Desk

While announcing the mid-term review of the Monetary and Credit Policy for 2002-03, on Tuesday, Reserve Bank of India Governor Bimal Jalan indicated that India's foreign exchange reserves have increased sharply from $45.2 billion on October 26, 2001 to $64.0 billion by October 25, 2002, an increase of $18.8 billion.

The overall approach to the management of India's foreign exchange reserves in recent years has reflected the changing composition of balance of payments, and has endeavoured to reflect the "liquidity risks" associated with different types of flows and other requirements such as "the size of the current account deficit; the size of short-term liabilities (including current repayment obligations on long-term loans); the possible variability in portfolio investment and other types of capital flows; the unanticipated pressures on the balance of payments arising out of external shocks; and movements in the repatriable foreign currency deposits of non-resident Indians," Jalan said.

Jalan also said that most of the increase in reserves in the recent period is through net purchases by RBI in the domestic forex market, for which an equivalent amount of domestic currency has been released to the concerned domestic entities, including public sector units, corporates and individuals.

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