IOC sees $12 bln revenue loss this fiscal

MUMBAI - State-run fuel marketing firm Indian Oil Corp's revenue losses on fuel sales for the current fiscal year will be 590 billion rupees ($12.1 billion), its chairman said on Thursday.

IOC is making profits on sales of petrol and diesel, but is still incurring a loss on cooking gas and kerosene, Chairman Sarthak Behuria told reporters.

IOC is losing 77 rupees of revenue per cylinder of cooking gas sold, and 12 rupees for a litre of kerosene, but is making 1.60 rupees per litre of petrol it retails and nearly 3 rupees on a litre of diesel, he said.

Overall the firm was losing about 50-60 million rupees per day, Behuria said.

In India, state-run oil marketing companies are made to sell fuel at government-controlled prices to keep inflation in check and help poor and middle-class households.

These firms are compensated by way of oil bonds from the government, while state-run upstream oil companies such as Oil & Natural Gas Corp sell them heavily discounted crude.

IOC, the country's largest state-run refiner, plans to import 46 million tonnes of crude oil in the fiscal year 2009/10.

Gold spikes to a record high of Rs 14,900

Maintaining its record making spree, gold on Friday scaled a new high of Rs 14,900 per 10 gram on the bullion market here on aggressive buying by jewelers amid firming trend in the global markets.

Gold prices spurted by Rs 350 to close at record Rs 14,900 per 10 gram.

Marketmen said heavy buying by jewellery fabricators to meet the marriage season demand pushed up the gold prices.

A significant support from the overseas markets where gold rose to 948.60 dollar an ounce, a level never seen before July 23, also support the trend, they added.

Gold prices in overseas markets, which set trend in domestic markets, climbed in day-to-day trading on fears that US government's rescue plan may not revive the economy.

"Presently, there is investment buying at existing higher levels joined by actual users for the marriage season," All India Sarafa Bazar President Sheel Chand Jain said.

There were several positive factor behind the current rally and the precious metal climbing in the futures market remained additional boosting reason, Rakesh Anand, a Multi Commodity Exchange trader, said.

The weakening equity and forex markets left no other option for investors but to buy gold, he added.

India gold hits all-time high on safe-haven buying

MUMBAI - India's gold futures hit a record high on Thursday on safe-haven buying, and on support from a weaker rupee, analysts said.

A bullish momentum is expected in the near-term as investors would continue to seek refuge in the safe-haven asset amid a deepening global recession, they said.

A weak rupee was further providing support, making the imported yellow metal expensive.

"There is no looking back in gold," said Debjyoti Chatterjee, an associate vice-president at MAPE ADMISI Research, adding "it was the ETF buying overseas along with speculative interest that moved prices higher."

Holdings of SPDR Gold Trust , the world's largest gold-backed exchange-traded fund, rose 40.37 tonnes, or 4.5 percent, to a record 935.09 tonnes on Feb. 11.

"As the session progresses, expect further buying in gold to emerge and any dips from here on might be used as fresh buying opportunities," said Pradeep Unni, a senior research analyst with Richcomm Global Services in Dubai.

Gold has entered into a bull zone after breaking the 14,000-rupee barrier, Unni said.

"With this, gold is currently in the path of next resistance of 15,200-15,500," Unni added.

"Traders will have to be very cautious about markets getting overbought and trade with very strict stop losses," MAPE ADMISI's Chatterjee added.

Gold futures on the Multi Commodity Exchange (MCX) struck a record high of 14,760 rupees per 10 grams, before easing slightly. The contract traded at 14,708 rupees per 10 grams at 3:41 p.m.. It has gained 8.1 percent so far this year.

In 2008, gold soared to its year-high of 14,320, up 35.1 percent from its 2007 close, before falling to 11,290 on Oct. 24. Gold ended the year higher by 29.2 percent at 13,690 rupees as investors sought safety in the precious metal.

"There is hardly any asset class which can relied upon amid these recessionary times," said Harish Galipelli, head of research with Karvy Comtrade in Hyderabad, adding "gold may rocket to 15,200 by tomorrow."

SILVER RISES

Silver futures on the MCX also moved higher tracking gold, analysts said.

"...22,000 (rupees per kg) is quiet possible in silver by tomorrow," said Karvy's Galipelli.

Analysts said silver's upside will be capped on subdued base metals complex.

The white metal is usually influenced by gold as investors see all precious metals as one class. But the metal also takes a cue from base metals, particularly copper, as it is partly an industrial metal used in photography and electronics.

Silver futures on MCX was 0.88 percent higher at 21,372 rupees per kg at 3:42 p.m.

Outlook for base metals remains weak in near-term: StanChart

The price outlook for base metals is expected to remain weak in the near-term due to poor demand conditions, stated a Standard Chartered Bank report. Base metal prices have remained under downward pressure in the last few weeks, with inventories building sharply on the London Metal Exchange (LME) and demand conditions continue to worsen in most parts of the global economy.

"For the base metals complex, we maintain our view that prices are generally close to a floor (determined by operating cost levels), but we are looking for more weakness in the next few months due to poor demand conditions," said a latest monthly analysis of commodity trends released by Standard Chartered Bank.

Copper prices could head below $3,000 per tonne in the months ahead as LME inventories rise and producers struggle to realign output levels with demand. The prospects for aluminium over the next few months are pretty bleak. Demand has dropped further in the past few months and producers are reluctant to cut back. Price may average $1,420 per tonne for the first quarter in 2009, the report said.

"Our view on nickel has not changed in the past few weeks. We continue to believe that prices will trend lower in the weeks ahead. Problems for the industry include the large amount of inventory accumulated on the LME," the report added.

The worst is not over for the zinc industry, as prices could head back towards the $1,000-a-tonne level unless demand improves. Tin will ultimately be one of the better-performing base metals this year. For the time being, though the bank expects weak demand to be a key driver keeping prices subdued for the next few months at least.

For base metals, the price trend in the second half of 2009 is expected to be broadly upwards. Copper, lead and tin should rally significantly, while aluminium and nickel prices will likely be subdued given high stock levels.

Hailstorms to hit wheat-growing areas, lower harvest

Hailstorms may lash the main wheat-growing regions in India, the world's second biggest producer, threatening crop prospects, the weather bureau said.Hailstorms or thundershowers are likely over northwestern states, including Punjab and Haryana, the biggest wheat growers, in the next 24 hours, the India Meteorological Department said on its web site on Tuesday. Adverse weather may dampen India's plan to harvest a record wheat crop for a second year and resume exports. Production may exceed last year's 78.4 million tonne, the agriculture ministry said.

"Hailstorms always cause some damage to crops in the key growth phase," RP Samui, head of agricultural meteorology at the weather bureau, said from Pune. "The extent of damage to wheat will depend on the severity of the hailstorms."

Wheat, India's biggest winter-sown food grain crop, was sown on 27.6 million hectare (68 million acre), up from 27.4 million hectare a year earlier, according to the agriculture ministry. The crop will be harvested in March and April. "Above normal temperature in parts of Uttar Pradesh, Gujarat and Madhya Pradesh in the past two weeks may also reduce yields," said MK Dattaraj, president, Roller Flour Millers Federation of India, in Bangalore. "Wheat output may total 77 million tonne, less than the 78.5-million target set by the agriculture ministry," he said.

Dalian Commodity Exchange plans live pigs futures

The Dalian Commodity Exchange (DCE) is expecting a prominent prospect of soon launching of live pigs futures. The exchange had worked out a standardised contract for pig futures that awaited the green light from Chinese regulators. The exchange has been mulling launch of the futures since 2006. However, it is difficult to establish standards for breeding, delivery and quarantine of pigs. The regulators are cautious about the matter and thus the futures have not debuted by far.

The Chinese futures industry has noticed that it was for the first time that a document of the CPC Central Committee and State Council of China referred to the expression of stabilising the development of the pig industry through futures transactions. "The CPC Central Committee and State Council recently issued several opinions on promoting agriculture in 2009 continuously by increasing peasants' income and stable development, which referred to 'adopting such measures as market early warning, reserve adjustment, additional insurances, and futures transactions to stabilise the development of the pig industry'," as stated in the circular issued by the exchange on its web site. The introduction of live pig futures will help stabilise pork production.

Currently, the exchange's listed futures products are non-genetically modified soybean, or soybean No.1, genetically modified soybean, or soybean No.2, soybean meal, soybean oil, corn, LLDPE, RBD palm oil and malting barley.

"In 2009, the DCE will continue to push forward trading goods and regulation innovations on the safety and soundness basis by focusing on providing services to the market, the industry and play the role of a market," Liu Xingqiang, president and CEO, DCE, said.

In 2008, exchange witnessed an annual transaction of 638 million contracts with a turnover of 27.49 trillion yuan, an increase of 71.95% and 130.49% year-on-year respectively, which accounted for 46.80% and 38.22% of the national market.

Gold inches up while ETF hits record, U.S. stimulus eyed

TOKYO - Gold inched up closer to $900 an ounce on Tuesday, but the market was capped as investors awaited the expected passage this week of U.S. economic stimulus measures.

Investors have been taking profits after the market hit a near four-month high of $930 but failed to hold that level.

The focus is now on the U.S. Congress and the $800-billion economic stimulus package, with investors seeking clues on whether it will be enough to shore up the sagging U.S. economy.

President Barack Obama has been urging Congress to act swiftly on the stimulus bill.

"Everybody is waiting for the stimulus package, which is expected by the end of the week," said Adrian Koh, a trader at Philip Futures.

If the package contained details deemed effective for the economy, "it could lead to investors stopping buying of gold and moving out of the safe-haven gold market," he said.

Gold was trading at $898.80 an ounce, up $3.8 or 0.4 percent, from New York's notional close on Monday.

Gold has gradually gained in popularity among investors as uncertainty over the global economy has increased in the wake of the financial crisis that battered markets across the board.

Massive fiscal stimulus measures announced by governments have also raised concerns about the risk of rising inflation, giving traders another incentive to buy gold as a hedge against price increases.

Holdings in the world's largest gold-backed exchange-traded fund hit a fresh record, reflecting the strength of investor appetite for the yellow metal.

The SPDR Gold Trust, which issues securities backed by physical stocks of gold, hit a record 881.87 tonnes on Feb. 9, up 1.7 percent from the previous day.

"The link between the dollar and gold has been positive over the past one to two weeks, suggesting that players are still bullish on the market's longer-term outlook," Koh said.

The dollar eased 0.1 percent against the yen but rose 1.5 percent against the euro.

The U.S. Treasury has dropped plans to establish a "bad bank" to buy distressed assets from commercial banks as part of a financial rescue package, CNBC reported on its website on Tuesday, adding to doubts that the plan would be effective.

World markets fall as US stimulus rally fades

LONDON -- World stock markets mostly fell Monday as a rally over the U.S. economic stimulus plan began to fade amid more gloomy corporate news.
By afternoon in Europe, Britain's FTSE 100 was down 0.4 percent at 4,276.21, Germany's DAX fell 0.6 percent to 4,615.05 and France's CAC 40 sank 0.7 percent to 3,099.88.

Wall Street futures also slipped, suggesting U.S. markets would shed some of last week's gains. Dow futures fell 64, or 0.8 percent, to 8,190, and Standard & Poor's 500 futures were down 8.8, or 1.1 percent, at 858.90.

Stocks advanced strongly last week on expectations the U.S. measures, expected to pass the Senate Tuesday, will dampen the country's deepest recession in decades by stemming massive job losses and increasing spending. The $827 billion Senate version would have to be reconciled with a version containing $820 billion in spending and tax cuts passed by the House of Representatives.

A coming overhaul of the government's financial bailout program, to be detailed by Treasury Secretary Timothy Geithner on Tuesday, also has given sentiment a lift. Among new measures under consideration are guarantees to help banks limit losses from their souring assets.

Amid the anticipation over the government's plans, there were stark reminders that the world economy remains in serious difficulty.

Nissan Motor Co. said it will slash 20,000 jobs, or 8.5 percent of its global work force, over the next year to cope with what the Japanese automaker expects will be its first annual loss in nine years.

Michigan-based home appliance maker Whirlpool Corp. said fourth-quarter profit dropped 77 percent, hurt by a restructuring charge, a recall expense and the stronger dollar.

Europe traded down and most markets in Asia gave up much of their gains by the afternoon there. Analysts say much of the recent rise had been fueled by investors looking to capitalize on the markets' momentum, not a fundamental shift in sentiment.

"There's still bad macro news and bad corporate news that will outweigh the stimulus hopes in the near term," said Desmond Tjiang, who helps manage $4 billion in Asian equities as a chief investment officer at Fortis Investment Management in Hong Kong.

"After the stimulus package, what other good news can there be? I'm just very cautious."

In London, Barclays PLC was a big gainer after it said its 2008 net profit fell only 1 percent as a one-off gain from its cut-price purchase of the North American operations of Lehman Brothers helped shore up its finances. Shares in Britain's third-largest bank by assets jumped by 10.1 percent.

"Otherwise it's a continued move towards cyclical stocks," said Jane Coffey, head of equities at Royal London Asset Management. "Risk appetite is beginning to pick up. Last week we saw the strongest performances coming through the industrials and mining stocks and even in banks, and that seems to be a general theme continuing today, even though the market is down."

In Paris, shares in Renault SA and PSA Peugeot-Citroen rose 3.7 percent and 4.6 percent after news reports said the French government was set to unveil a bailout plan for the auto industry that includes euro6 billion ($7.7 billion) in loans.

In Asia, Japan's Nikkei 225 stock average fell 107.59, or 1.3 percent, to 7969.03, while South Korea's Kospi was off 0.6 percent at 1,202.69. Singapore and New Zealand stock markets also lost ground.

In Hong Kong, the Hang Seng rose 0.8 percent to 13,769.06 in a volatile session that saw the benchmark turn negative. Stock measures in Australia, Taiwan and India were higher as well.

In the U.S. on Friday, investors looked past abysmal news about the country's job market and instead hoped it would increase pressure on lawmakers to pass the stimulus bill. The Dow industrials rose 2.7 percent to 8,280.59 after rising Thursday. Broader stock indicators also jumped. The Standard & Poor's 500 index rose 2.7 percent to 868.60.

In Asia on Monday, there were more signs of corporate distress.

In Japan, the government reported a decline in machinery orders, while Nissan Motor Co. said it was slashing 20,000 jobs and had fallen into the red in the fiscal third quarter. Japan's No. 3 automaker also forecast a net loss for the full year through March, providing fresh evidence of the pain Asia's exporters are feeling as Western consumers cut back their spending.

Japan's biggest brokerage firm Nomura Holdings tumbled more than 14 percent on news it might be forced to sell more shares to raise capital.

Oil prices gained modestly in European trade, with light, sweet crude for March delivery exchanging hands at $40.67 a barrel, up 50 cents. The contract dropped a dollar to settle at $40.17 a barrel on the New York Mercantile Exchange overnight.

Oil climbs towards $41 after OPEC supply pledge

LONDON - Oil rose toward $41 a barrel on Monday after OPEC said it was willing to cut oil output further if needed to stabilize oil prices.

The market was also supported by a giant U.S. economic stimulus package that the administration of U.S. President Barack Obama is expected to get through Congress this week.

U.S. crude for March delivery rose 65 cents to $40.82 a barrel by 1323 GMT (8:23 a.m. EST). London Brent climbed 83 cents to $47.04.

"If we think we still need more action, I'm sure the conference will take more action to stabilize the market," the secretary-general of the Organization of Petroleum Exporting Countries, Abdullah al-Badri, told reporters in London.

Badri also said the 12-member group appeared to be implementing promises of production cuts more thoroughly than expected by some in the oil market with 80 percent compliance.

OPEC has said it will cut oil supply by 4.2 million barrels per day (bpd) from its level of production in September in an attempt to bolster oil prices that have fallen from a record high of almost $150 a barrel in July.

Harry Tchilinguirian, oil analyst at BNP Paribas in London, said the market was also looking ahead to the passage this week of a massive economic stimulus package to try to revive the U.S. economy.

STIMULUS

"The stimulus package is a supportive structural factor," he said. "It should begin to have an impact on the economy in the second half of this year and is an underlying element conditioning sentiment."

Top aides to President Obama on Sunday urged Democratic and Republican lawmakers to set aside political differences and quickly approve the stimulus package this week, as the world's largest economy suffers from the worst financial crisis in 70 years.

Later on Monday, the Democratic-led Senate, with the help of a handful of Republicans, was due to vote to end debate on the $827 billion plan to clear the way for its passage on Tuesday.

Oil prices fell on Friday after news of steep job cuts in the United States, where nearly 600,000 jobs were slashed last month, the most severe cut since December 1974 prompting worries of still weaker demand in the world's biggest oil consumer.

The financial malaise, which first sprang from home loan defaults in the United States, has swiftly spread to Europe and Asia, pushing a string of industrialized nations into recession.

Renewed violence in Nigeria also helped buoy oil prices. Nigerian militants attacked a gas plant operated by Royal Dutch Shell in the Niger Delta on Saturday and warned of more attacks to come, but the army said it had repelled the raid and killed three gunmen.

Out of glitter

Flashiness is out and subdued celebration is in among wealthy Americans on Valentine's Day. As the economic crisis spreads and conspicuous consumption loses its luster, hedge fund millionaires and oil barons are shunning eye-catching items like yellow, red and blue diamonds in favour of lower-key gifts.

Anecdotally, those with investment portfolios worth more than $10 million are shunning flamboyant gifts that could be seen as out of step with the somber economic mood. "You have a level of social opprobrium," said Richard Baker, chief of luxury marketing researcher Premium Knowledge, adding the super-wealthy were anxious about "being labelled as ostentatious" and were "pulling back substantially." In recent years, he said, Valentine's Day spending among the $10-million-plus crowd rose by 8-10% a year. Common were gifts costing tens of thousands of dollars, Baker said, such as yellow diamonds and luxury time pieces from companies like Cartier, whose corporate parent Richemont posted a 12% drop in sales in the fourth quarter of 2008.

In the hedge fund epicentre of Greenwich, Connecticut, buyers are looking at traditional white diamonds, said John Green, chief of jewellery store chain Lux Bond and Green." In the historical downtown of Charleston, South Carolina, the mood looks less exuberant, said a local florist. "It's a combination of the economy and the mind-set of the American public," said Manny Gonzales, owner of Tiger Lily Florist. "Who is going to still pay $110 for roses?" he asked about Valentine's Day. "We are offering lower-priced, high-quality arrangements including tulips, hyacinths etc, which I think will be more popular this year than ever."

In Hollywood, flamboyant spending in expensive restaurants began slowing with the screen writer's strike in late 2007, said a public relations specialist for eateries such as Patina Restaurant and Citrus at Social. Valentine's Day reservations at high-end restaurants are down about 25% from last year, she said. Home-style comfort food such as burgers and macaroni and cheese are more in vogue than refined Italian food and haute French cuisine. Chuck Hunt, vice president of the New York State Restaurant Association, said habits are however, not likely to change for patrons of very high-end spots with checks in the hundreds of dollars per person."Even if they lost half their fortune..." he said, "they probably are not going to change their dining regimen."

Developing countries turn to South-South trade

GENEVA - Developing countries hoping to compensate for slumping demand in rich countries and falling commodity prices are looking at ways to bolster one of the most dynamic parts of their economies -- South-South trade.

In its latest economic forecast last month, the International Monetary Fund said developing countries would grow by 3.3 percent this year, while advanced economies would shrink by 2 percent, with the world economy as a whole stagnating.

The U.N. Conference on Trade and Development (UNCTAD) forecasts exports from developing countries, many of whose economic strategies are predicated on strong export growth, could fall by 9.2 percent in 2009. South-South trade is likely to be the only bright spot.

UNCTAD Secretary-General Supachai Panitchpakdi said the financial crisis had shaken the economic foundations of the North and was threatening to shatter the growth and development aspirations of the South.

"The timing, therefore, is right to explore how greater South-South cooperation can help developing countries to cope with the crisis," Supachai, a former head of the World Trade Organisation (WTO) and deputy Thai prime minister, told an UNCTAD meeting on South-South trade last week.

POWER SHIFT

The attempt by developing countries, especially big emerging markets such as China, India and Brazil, to rely more on each other is a further sign of a shift in global power away from the United States and Europe as the world tackles the economic crisis.

Brazil's Foreign Minister Celso Amorim met Indian Commerce Minister Kamal Nath and South African Trade Minister Mandisi Mpahlwa on the sidelines of the World Economic Forum in Davos on Jan. 31 to discuss how to boost their mutual trade.

Amorim told reporters they had agreed that South Africa would host a meeting in the near future to discuss a trade agreement between the Latin American trade bloc Mercosur, the South African Customs Union (SACU) and India.

"We also want to study mechanisms that will somehow permit our trade to continue to flow in a way that is not affected by what happens in the financial markets," Amorim said, touching on a key concern of developing countries which have seen credit dry up because of the financial crisis.

Amorim said it was too soon to give details but gave the example of trade between Brazil and Argentina which is settled in local currency.

Such cooperation will not always be easy as the economic slowdown tempts developing and rich countries to create barriers to each other's exports.

India raised duties on steel last year, a move trade experts say was directed at imports from China, and has banned imports of toys from China for six months, which may prompt Beijing to launch a dispute through the WTO.

Developments in recent years are a platform to build on. Trade among developing countries has been increasing, as a share of developing countries' total trade and as a share of global commerce.

WTO figures show that South-South trade accounted for 16.4 percent of the $14 trillion in total world exports in 2007, up from 11.5 percent of the total in 2000.

"South-South trade has been one of the most dynamic components of international trade generally for the last 10 years or so," said Bonapas Onguglo, a senior economist at UNCTAD working on South-South trade.

"Our expectation is that it's likely to continue (to grow) but it will slow down. The outlook is we are optimistic about the growth of South-South trade being a more dynamic component of international trade."

One reason South-South trade is like to continue to expand is that, as emerging markets grow they will need food, energy and semi-finished products from other developing countries.

That could encourage emerging nations to invest in developing countries as China is doing in Africa.

"They need consumers with purchasing power to continue to buy their products, which they are producing to sell ultimately in the global market but also in the Southern market," Onguglo said. "In the end commercial interest prevails."

Options to strengthen South-South trade included increasing financing from regional development banks to compensate for loss of aid and regional stimulus packages focusing on improvements to infrastructure, Supachai suggested.

Developing countries could diversify their foreign exchange reserves by buying each other's debt, or provide each other with liquidity through swap arrangements, as Asian currencies did after the 1997-98 Asian crisis in the Chiang Main initiative, he said.

Greater reliance on South-South trade does not mean developing countries will turn away from trade with industrialised countries or pursue economic self-sufficiency as many advocated in the 1970s and 1980s.

The increased links, including transport, built up in recent years, are an opportunity to cope with the crisis.

"South-South trade is one avenue. We've not used it fully -- now is the time," Onguglo said.

Iraq oil minister sees OPEC cuts in March

BAGHDAD - OPEC is likely to decide to cut oil production targets when it meets in March, which should help prices gradually rise back above a fair price of $70 a barrel, Iraqi Oil Minister Hussain al-Shahristani said on Saturday.

He also said he will seek new powers for oil officials to sign big deals without approval of Iraq's cabinet in an effort to revive flagging production. He blamed red tape and a slow budget process for delaying efforts to boost production in Iraq.

"The year 2009 will be a tough economic year. It is expected demand for crude oil will drop," Shahristani told a Baghdad oil industry conference. "In March, OPEC will meet and there is an intention to decide a further cut to shore up prices."

Iraq, a founding member of OPEC with the world's third largest reserves, is not bound by the group's production limits but has had trouble maintaining its output -- much less meeting ambitious growth targets -- because of crumbling infrastructure.

"We expect that crude prices will be restored to more than $70 a barrel, but this will not be achieved in coming months. This will happen gradually."

Shahristani said he hoped to speed up reconstruction of Iraq's oil sector by forming a national oil company, which would be able to make deals without waiting for the cabinet approval required in the country's cumbersome political process.

He said red tape had held up the import of oil equipment which was stuck in port, and the slow budget process had delayed much-needed investment.

"I find it strange that explosives and drugs are moving through the borders, but when it comes to equipment of the Iraqi oil ministry we face obstructions," he said.

"We have dilapidated oil pipelines, which affects crude production. So far we have not been able to buy a new pipeline because we don't have enough money and the 2009 budget is not yet approved."

Shahristani repeated the government's ambitious plans to increase oil production, now about 2.4 million barrels per day, to 4.0 or 4.5 million by 2013 and 6.0 million by 2018.

He said Iraq plans to build a new off-shore floating oil export terminal in the Gulf with a capacity of 1.5 million barrels per day, "as soon as possible".

Iraq will also build a new terminal at its main southern port of Basra, he said, and he repeated plans to reopen an export pipeline through Syria.

Forex reserves climb $990 m to $248.6 bn

After declining continuously for the last few weeks, the country's foreign exchange reserves rose $990 million to $248.6 billion in the week ended January 30, 2009, the Reserve Bank of India (RBI) said in its weekly statistical statement, on Friday.

Foreign-currency assets increased $589 million to $238.9 billion, while the nation's gold reserves rose $399 million to $8.88 billion, the central bank said.

India's special drawing rights with the International Monetary Fund were unchanged at $3 million, while its reserves with the IMF increased $2 million to $830 million.

The change in foreign-currency assets is partly because of changes in the value of the dollar against the euro, yen and other currencies during the period, the central bank said.

India's foreign-exchange reserves declined $44.06 billion in the past year, the bank said. The reserves comprise overseas currencies, gold and special drawing rights with the IMF. Meanwhile, bank loans fell by Rs 13,840 crore in the two weeks ended January 16, raising outstanding advances to Rs 26.5 lakh crore, according to central bank.

Loans to industry and consumers declined by Rs 8,910 crore during the period, while food credit dropped Rs 4,920 lakh crore, the RBI said.

Credit went up by 22.1%, or by Rs 4,79,597 crore, in the 12 months through January 16. Total bank deposits rose by 20%, or Rs 6, 05,816 crore, in the same period to Rs 36,30,079 crore.

Money supply in India grew 18.7% in the two weeks ended January 16 from a year earlier, compared with 19.6% in the previous two weeks, the central bank said.

M3, which mainly comprises currency in public circulation, bank deposits and money invested in other saving plans, stood at Rs 45,14,800 crore on January 16, the Reserve Bank of India said.