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Journalism of Courage
MUMBAI, MAY 1: The pressure on foreign exchange reserves would be at a comfortable level in 1999-2000. Despite a widening trade deficit, India8217;s balance of payment BoP position also appears to be comfortable. 8220;We see that the pressure on reserves will be about 3 billion, which is a comfortable level given the current forex reserves of 29.6 billion,8221; ICICI Securities said in its debt markets update. This is because of a comfortable forex reserves position including gold, SDRs and foreign currency assets of over 32 billion, the report added.
It has projected balance of payments for 1999-2000 with a few conservative assumptions that export growth would be at five per cent and import growth at 10, fuelled by higher oil prices this year. The first estimate on the BoP position is likely to have a positive effect on the rupee which had received a bout of battering of late due to the political instability.The ICICI Securities report said that the trade deficit has continued to widen in 1998-99. quot;Datareleased by DGCIamp;S for the first eleven months indicates deficit of 8.2 billion compared to 6.4 billion in the corresponding period of 1997-98. Under conservative estimates we expect the pressure on reserves to be around 3 billion which appears comfortable given the current foreign reserves of 29.6 billion,quot; the report said.The study said that it has assumed export growth at 5 and import growth of 1. Most of the other cash flows are assumed similar to last year8217;s with the exception of commercial borrowings.
