Anurag Bhullar
Though total currency reserves held by RBI showed a drop in period April-September, the investment in foreign exchange assets exhibited an increase.
The amount of reserves of RBI invested in foreign-currency denominated assets went up from 34% (at March-end) to 40% (at Sep-end). These were majorly in federal debts. The information came from the half-yearly report released by RBI, showing the situation of foreign exchange reserves.
About 58% has been put in Central Banks like International Monetary Fund and Bank of International Settlements. The remaining is with foreign commercial banks.
The causes for current account deficit being blown up, (when compared the last year’s value from the present year) were the dip in exports and rise in commodity prices; which had a swelling effect on the import bill.
Another reason for foreign exchange reserves getting down was the dumping of Indian shares by FIIs, which was a net amount of $13 billion.
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