Home Business Unearthing black money can add $30 bn to FX reserves: BofA

Unearthing black money can add $30 bn to FX reserves: BofA


The unearthing of capital flight of “black” money Indians have allegedly stashed away in Swiss banks could add USD 30 billion to the country’s forex reserves, says a Bank of America Merrill Lynch report.

According to the global financial services major, though there would not be any immediate forex impact given the legal issues involved, it could add USD 30-35 billion to the forex reserves over time.

BofA-ML has worked with an estimate of capital flight of about USD 200 billion based on a recent research study.

According to the study, Raghbendra Jha and Duc Nguyen Truong, of Australian National University, estimated total capital flight of more than USD 186 billion during 1998-2012.

“If even half of this is unearthed, it could add USD 30-35 billion (three to four months of current import cover) to forex reserves over time,” BofA-ML said in a research note Wednesday.

The Centre Wednesday placed a list of names of 627 Indian account holders in HSBC bank, Geneva in black money case before the Supreme Court which asked SIT to go through the list and take appropriate action in accordance with law.

A bench headed by Chief Justice H L Dattu did not open the sealed envelope containing the names placed by the Centre and said that it would be opened only by the Chairman and Vice-Chairman of the Supreme Court-appointed Special Investigation Team (SIT).

It asked the SIT to submit status report of its probe by November-end.

Placing the documents before the bench, Attorney General Mukul Rohatgi said details of account holders are of year 2006 which were supplied by the French government to the Centre in 2011.

The report further noted that rupee is expected to hold Rs 58-62/USD and BofA-ML’s Asia forex strategist, Adarsh Sinha, forecasts INR to be at Rs 61/USD in December.