Reserve Bank shrugs off Russian bet on G-secs
However, apex bank didn’t divulge details of trade surplus invested by Russian entities in govt securities (G-secs)
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Mumbai Governor Shaktikanta Das on Thursday said the Reserve Bank of India (RBI) is not ‘unduly concerned’ about the Russian investments in Indian government bonds. Without sharing the details of the trade surplus invested by Russian entities in government securities (G-secs), Das underlined that trade relations between the two countries are for the long term and there is no reason to fear a pullout of the money. In May this year, the Indian Banks Association (IBA) had said that Russia is investing the surplus it earns out of oil sales to India in G-secs, but the market’s estimates on the quantum vary from $10-22 billion.
“Its not something about which we are really unduly concerned. We are not concerned unduly because market has its estimates. So far as we are concerned, it is not going to cause any (impact),” Das told reporters at the post-policy press meet here.
He added that India is far better placed with forex reserves of over $600 billion to deal with any situation. Deputy Governor T Rabi Sankar said it will not be proper for the RBI to speak specifically about the amounts invested by a country or a particular entity, but added that such investments are allowed through the foreign portfolio investor or vostro account route.
“It may not be accurate to think that the trade surplus is staying in the country. Because a large part of that is oil. Oil, up to the global cap can be paid through the normal channels.
It is getting paid, most of it is getting paid, some of it could be remaining as rupee balances in SRVA accounts. Don’t include the trade balance of $40 billion or something to the amount that must remain within the country,” Sankar added. Das also said that after the war between Russia and Ukraine broke out last year, there were fears of a depreciation in the rupee but the same did not turn out to be true because of RBI’s market interventions. “None of that happened because the RBI was there in the market. And RBI is always there in the market,” Das said, adding that the RBI is confident of dealing with any situation if at all it arises.
