Mumbai: The central government borrowed Rs10,903 crore from the Reserve Bank of India or RBI in the last week of August, according to the weekly statistical supplement released by the Indian central bank on Friday. This is the first time the government has borrowed funds from the central bank since 3 August 2007. The government had borrowed Rs31,643 crore last year to bridge the temporary mismatch between its expenditure and income.
Meanwhile, India’s foreign exchange reserves dropped by about $6.5 billion to $288.81 billion in the week ended 5 September as RBI has aggressively been selling dollars to stem depreciation of the local currency against the greenback. Rupee closed at 45.75/76 per dollar on Friday, it’s 23-month low amidst heavy dollar demand by foreign institutional investors. So far, the local unit has lost close to 14% against the dollar this year.