Mumbai, Jan 28 (UNI) India's balance of payments position continued to remain comfortable during the first half of 2007-08, the Reserve Bank India today said.
In its 'Macroeconomic and Monetary Developments: Third Quarter Review 2007-08' on the eve of the third-Quarter Review of the Annual Policy Statement for 2007-08 to be announced tomorrow, the Apex Bank said India's foreign exchange reserves were US dollar 284.9 billion as on January 18, 2008, showing an increase of US dollar 85.7 billion over end-March 2007.
The merchandise trade deficit, on balance of payments basis, widened to US dollar 42.4 billion in April-September 2007 from US dollar 33.8 billion in April-September 2006. Net surplus under invisibles (services, transfers and income taken together) was higher at US dollar 31.7 billion in April-September 2007 (US dollar 23.4 billion in April-September 2006).
The net invisible surplus offset a large part of the trade deficit (74.7 per cent during April-September 2007 as compared with 69.4 per cent during April-September 2006).
Despite large merchandise trade deficit, higher net invisible surplus, mainly emanating from private transfers, contained the current account deficit at US dollar 10.7 billion in the first half of 2007-08 (US dollar 10.3 billion in April-September 2006).
The current account deficit was financed by capital flows which have remained large during 2007-08 so far. Upto January 11, 2008, net inflows by FIIs amounted to US .8 billion (US $ 2.5 billion in the corresponding period of 2006-07). Inflows under foreign direct investment (FDI) were US dollar 13.8 billion during April-November 2007 as against US dollar 10.1 billion during the corresponding period of the previous year.
During the current financial year 2007-08 (April-September), inflows (net) under external commercial borrowings (ECBs) amounted to US dollar 10.6 billion (US dollar 5.7 billion during April-September 2006). The ECB approvals (including under the automatic route) amounted to US dollar 23.3 billion during April-December 2007 as compared with US dollar 15.3 billion during April-December 2006. Non-resident Indians' deposits registered net outflows of US dollar 433 million during April-September 2007 as against net inflows of US dollar 3.0 billion during April-September 2006.
According to the data released by the Directorate General of Commercial Intelligence and Statistics (DGCI&S), during 2007-08 so far (April-November), merchandise exports posted a growth rate of around 22 per cent moderating from the growth rate of 26.2 per cent during April-November 2006, while growth in imports at 26.9 per cent was marginally lower than that of 27.4 per cent in April-November 2006. Non-oil imports recorded a substantial increase, while oil imports showed a sharp deceleration in growth. Overall, the merchandise trade deficit widened to US dollar 52.8 billion in April-November 2007 from US dollar 38.5 billion in April-November 2006.
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