(a) the break-up of foreign exchange reserves of various countries with India at present;
(b) the amount invested by the Reserve Bank of India out of the foreign exchange reserves during the last three years, year-wise and;
(c) the impact on the prices due to non-utilisation of the reserves
for productive purposes?
MINISTER OF FINANCE & COMPANY AFFAIRS (SHRI JASWANT SINGH)
(a), (b) & (c) : A statement is placed on the Table of the House.
Statement referred to in reply to parts (a) to (c) of the Lok Sabha
Starred Question No. 386 regarding `Foreign Exchange Reserves` for
answer on 9-08-2002.
(a):The foreign currency assets of the Reserve Bank of India (RBI)
broadly comprise convertible hard currencies. For the purpose of
Special Data Dissemination Standards (SDDS) data template, prescribed
by International Monetary Fund, currencies are classified into
(i) those in the Special Drawing Right (SDR) basket, and, (ii)
those in non-SDR basket. As on June 30, 2002, 99.89 per cent of
India`s reserves were held in currencies in SDR basket and the
remaining 0.11 per cent in non-SDR basket.
(b): Investment of foreign exchange reserves by the Reserve Bank
of India is governed by the provisions of the Reserve Bank of
India Act, 1934, as modified from time to time. Accordingly,
the foreign exchange reserves are invested in approved foreign
securities and deposits abroad with due considerations of safety,
liquidity and yield of the funds so invested. India`s foreign
exchange reserves, which stood at US$ 38.0 billion at end-March
2000, increased to US$ 42.3 billion at end-March 2001 and further
to US$ 54.1 billion at end-March 2002. India`s foreign exchange
reserves stood at US $59.96 billion at end-July 2002.
(c): It is difficult to establish a direct relationship between
productive activities, utilisation of foreign exchange reserves
and the rate of inflation. However, despite significant increase
of foreign exchange reserves during 2001-02, the point to point
annual rate of inflation in terms of the Wholesale Price Index
(WPI) declined from 5.6 per cent in 2000-01 to 1.6 per cent in
2001-02 and 2.7 per cent as on July 20, 2002.