Foreign exchange (forex) resources dipped $1.55 billion during the week ended May 30, as the Reserve Bank of India (RBI) sold dollars on strong dollar demand, mainly by oil companies. In the latest fortnight, banks had continued to post a strong growth both in deposits as well as loans.

The central banks reserves may come under further pressure this week, with RBI selling dollars directly to oil companies.

According to the figures released in the weekly statistical supplement (WSS) by the RBI, total forex reserves, including gold an SDR dipped $1,557 million during the week ended May 30 to $314.6 billion, with almost all major component recording a dip during the week.

While foreign currency dipped $1,328 million, reserves with IMF dipped $4 million. The value of gold in reserves dipped $225 million while reserves with the IMF dipped $4 million.

Loans extended by commercial banks rose Rs 17,761 crore during the fortnight ended May 23 to touch Rs 23,64,417 crore. Both food and non-food credit rose during the fortnight by Rs 4,301 crore and Rs 13,460 crore, respectively.

Aggregate deposits raised by commercial banks touched Rs 32,35,532 crore as on May 23, up Rs 14,733 crore over the previous fortnights levels. While demand deposits fell Rs 2,029 crore, term deposits rose Rs 16,762 crore.

Investments in government and other approved securities touched Rs 10,20,180 crore as on May 23, up Rs 6,232 crore over the previous fortnights levels.

As per the updated money supply figures, the total stock of money in the system amounted to Rs 40,77,302 crore as on May 23, a rise of Rs 16,724 crore over the previous fortnights levels.

While the currency with public and term deposits rose Rs 2,017 crore and Rs 16,713 crore, respectively and demand deposits dipped Rs 2,144 crore.

At the current levels, the annual growth in money supply is at 22.5%, way above the central banks comfort levels.