India - Money

India has pursued a conservative policy in the expansion of its money supply during the past 2 decades. Money was thought to have grown by a relatively high rate of 15 percent during 2000-01, however. The reserve bank of India is the sole authority for issuing the national currency. It formulates and administers monetary policy with a view to ensuring stability in prices while promoting increased production of goods and services via the deployment of credit. The reserve bank's monetary policy

also plays an important role in maintaining the stability of the exchange value of the Indian rupee. Furthermore, the reserve bank is in charge of the borrowing program of the government from both domestic and international lenders. High levels of exports have led to a comfortable balance of payments situation in recent years, which in turn has put at the disposal of the reserve bank, aside from the nation's gold reserves, as much as US$38 billion of cash reserves in 2001. The total money supply in India (which includes the various deposits in commercial banks, the reserve bank, and the currency in the hands of the public) is estimated to have grown by 60 percent since 1995 and to have been a bit more than Rs3 trillion (US$66 billion) in 2000.