India’s foreign exchange reserves showed an increase of $4.26 billion to $339.99 billion for the week ended March 20, according to the Reserve Bank of India (RBI) data showed.
According to the RBI’s weekly statistical supplement, foreign currency assets, the biggest component of the forex reserves grew by $4.53 billion at $314.88 billion in the week under review.
The foreign currency assets had declined by $1.97 billion at $310.34 billion in the week ended March 13. under review. However, for the week ended March 6, the foreign currency assets had risen by $122.4 million at $312.32 billion.
The RBI said the foreign currency assets, expressed in US dollar terms, include the effect of appreciation or depreciation of non-US currencies such as the pound sterling, euro and yen held in reserve.
India’s reserve position with the International Monetary Fund (IMF) in the week ended March 20 decreased by $295.8 million and stood at $1.28 billion.
The value of special drawing rights (SDRs) was higher by $18.2 million in the week under review at $3.97 billion.
Gold reserves were static at $19.83 billion. The gold reserves had plunged by $346.2 million in the week ended March 6.
The International Monetary Fund (IMF) reaffirmed on Wednesday that India will be the fastest growing major economy in 2018, with a growth rate of 7.4 per cent that rises to 7.8 per cent in 2019 with medium-term prospects remaining positive.
The IMF’s Asia and Pacific Regional Economic Outlook report said that India was recovering from the effects of demonetisation and the introduction of the Goods and Services Tax and “the recovery is expected to be underpinned by a rebound from transitory shocks as well as robust private consumption.”
Medium-term consumer price index inflation “is forecast to remain within but closer to the upper bound of the Reserve Bank of India’s inflation-targeting banda of four per cent with a plus or minus two per cent change, the report said.
However, it added a note of caution: “In India, given increased inflation pressure, monetary policy should maintain a tightening bias.”
It said the consumer price increase in 2017 was 3.6 per cent and projected it to be five per cent in 2018 and 2019.
“The current account deficit in fiscal year 2017-18 is expected to widen somewhat but should remain modest, financed by robust foreign direct investment inflows,” the report said.
After India, Bangladesh is projected to be the fastest-growing economy in South Asia with growth rates of seven per cent for 2018 and 2019; Sri Lanka is projected to grow at four per cent in 2018 and 4.5 in 2019, and Nepal five per cent in 2018 and four per cent in next. (Pakistan, which is grouped with the Middle East, is not covered in the Asia report.)
Overall, the report said that Asia continues to be both the fastest-growing region in the world and the main engine of the world’s economy.
The region contributes more than 60 per cent of global growth and three-quarters of this comes from India and China, which is expected to grow 6.6 per cent in 2018 and 6.4 per cent in 2019, it said.
The report said that US President Donald Trump’s fiscal stimulus is expected to support Asia’s exports and investment.
The Asian region’s growth rate was expected to be 5.6 per cent for 2018 and 2019.
However, in the medium term the report said that “downside risks dominate” for the region and these include a tightening of global financial conditions, a shift toward protectionist policies, and an increase in geopolitical tensions.
Because of these uncertainties the IMF urged the countries in the region to follow conservative policies “aimed at building buffers and increasing resilience” and push ahead with structural reforms.
“While mobile payments are expanding sharply in such economies as Bangladesh, India, and the Philippines, on average Asia is lagging sub-Saharan Africa,” the IMF said, adding that the region should take steps to ensure it is able to reap the full benefits of increasing digitalisation in the global economy. (IANS)