New Delhi, Feb 25: The country`s foreign exchange
reserves are at a comfortable level and the economy will not
be directly impacted, the Finance Ministry told Lok Sabha
today.
"Since the foreign exchange reserve position continues to
be at comfortable level, there is no direct impact on the
economy," Minister of State for Finance P K Bansal said in a
written reply to a query in the Parliament.
The government`s assurance comes at a time when the
reserve position has actually taken a significant hit falling
about 15 per cent in a little more than five months.
The foreign exchange reserves comprising foreign currency
assets (FCA), gold, special drawing rights and reserve tranche
position with International Monetary Fund (IMF), declined from
USD 295.31 billion at the end of August 2008 to USD 251.53
billion on February 6, 2009, the minister said.
Explaining the cause of reduction in foreign exchange
reserves, the Bansal said, "Intervention by the Reserve Bank
of India (RBI) in the foreign exchange market to smoothen
exchange rate volatility and valuation changes due to inter se
movement of US dollar against other currencies were major
factors responsible for decline in foreign exchange reserves."
Bureau Report
