| RBI sells special drawing rights to pay North Block |
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Mumbai/ New Delhi, 6 March The Reserve Bank of India (RBI) has sold special drawing rights ( SDRs) to the International Monetary Fund (IMF) for interim payment to the government for meeting the fiscal deficit target of 4.8 per cent of GDP in the current financial year. According to sources close to the development, the central bank has paid ₹ 10,000 crore to the government. The payment can't technically be termed a dividend as the central bank does not earn any income. The central bank generates asurplus which is transferred to the government after appropriation to reserve funds. According to the latest data, the country's foreign exchange reserves stand at $293.4 billion, of which foreign currency assets total $266.8 billion. SDRs constituted $445.6 billion of the foreign exchange reserves. The SDR is an international reserve asset, created by the IMF in 1969 to supplement its member- countries' official reserves. Its value is based on abasket of four key international currencies, and SDRs can be exchanged for freely usable currencies. Sources indicate the central bank has the option of replenishing the SDRs in the next financial year. The RBI's earnings mainly come from investments in foreign assets. On the domestic side, its income is generated from investments in government securities, the repo and reserve repo auctions under the liquidity adjustment facility and the marginal standing facility, among others. The RBI follows the JulyJune calendar for accounting purposes and after appropriation to reserve funds, it transfers the surplus to the government. Typically, the transfer takes place in August after the RBI's board finalises the accounts for the accounting year. The finance ministry demanded a portion of the projected surplus be transferred before the financial year- end to shore up its fiscal deficit numbers. The government, finally, projected a fiscal deficit of 4.6 per cent during the interim Budget. The fiscal deficit figure was, however, criticised by many experts on the grounds that Plan expenditure was reduced while non- Plan expenditure was increased, which could fuel retail inflation. The ministry had estimated ₹ 44,000 crore in dividend from the RBI, nationalised banks and financial institutions in the current fiscal. Last fiscal, the RBI had paid ₹ 33,100 crore to the government and ₹ 16,100 crore in the previous one. Turn to Page 19 > ₹ 10,000 crore to help ministry contain fiscal deficit RAINING CAPITAL Dividend/ surplus of RBI, nationalised banks and financial institutions (₹ crore)
'09- 10 29,223 '10- 11 23,931 '11- 12 22,118 '12- 13 40,406 '13- 14 RE 45,113 '14- 15 BE 49,414 RE: Revised estimate; BE: Budget estimate Source: Union Budget |
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