The Hindu : Forex reserves cross $100 billion

Online edition of India's National Newspaper
Sunday, Dec 21, 2003

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Forex reserves cross $100 billion

By Alok Mukherjee

NEW DELHI DEC. 20. From a low of $1.2 billion in July 1991, India's foreign exchange reserves crossed the historic high of $100 billion on Friday. The reserves, including gold and Special Drawing Rights of the International Monetary Fund, stood at $110.48 billion as of December 19, 2003.

Reacting to the development, the Union Finance Minister, Jaswant Singh, said in a statement today that "I am glad to share that this is a historic high, such a level of reserves never having reached earlier by the country. It may be recalled that the level of our foreign exchange reserves had fallen to a low of less than $1 billion in December 1990,'' he said. In July 1991, with only $1.2 billion in the kitty minus the gold reserves which had to be pledged abroad, the then Narasimha Rao Government went to the International Monetary Fund for a loan of $2.6 billion which came along with prescriptions for economic reforms. Since then, the reserves had gradually risen, but the flow turned into a torrent in the last one year.

The Finance Minister also underscored the point that since March 1991, while India's foreign exchange reserves had risen by around $94 billion, the country's external debt had gone up by only about $20 billion. "This level of foreign exchange reserves reinforces my conviction that our aim of self-reliance, for which we have worked for several decades since Independence, has now comfortably been reached in this period of "great confidence."

"More important, our reserves will add greater momentum to bolder economic reforms, enabling the country to achieve significantly higher growth. In fact, this will also provide a cushion, thus facilitating higher levels of investment activity in the country and abroad,'' he added.

The crossing of the $100 billion mark has been despite the prepayment of $5 billion official foreign debt in 2003 calendar year, payment of $5.5 billion on account of redemption of Resurgent India Bonds raised in the wake of sanctions after the 1998 Pokhran nuclear tests and contributing $498 million this year to the IMF for the Financial Transactions Plan.

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