Forex reserves rise to USD 353 billion: RBI

Top Stories

»	49% Indian startups now from tier 2, 3 cities: Jitendra Singh
»	'India ranks 3rd in global startup ecosystem & number of unicorns'
»	Tripura exported over 9K tonnes of pineapples in 2 years
»	CPI inflation eases to 6.71% in July, IIP falls to 12.3%
»	Rupee depreciates 12 paise to close at 79.64 against US dollar

SME Times News Bureau | 17 Oct, 2015
A strengthening rupee, buoyant equity markets coupled with a fall in dollar value boosted India's foreign exchange (Forex) kitty by USD 2.26 billion, experts said on Saturday.

Overall, the Forex reserves stood at USD 353.06 billion for the week ended October 9.

"The increase in Forex reserves can be attributed to an appreciation in rupee value and the weakening of US dollar against the major global currencies like Euro, Pound and Yen," Anindya Banerjee, associate vice president for currency derivatives with Kotak Securities, told IANS.

"It is perceived that the appreciation in rupee value allowed the Reserve Bank of India (RBI) to buy more dollars and keep rupee in a comfortable range," Banerjee said.

The rupee had closed at 64.74 to a US dollar during the week ended October 9. The rupee gained 77 paise on a weekly basis from its previous close at 65.51 to a US dollar in the week ended October 2.

Previously, a rise in the value of gold reserves had added USD 827.4 million to India's Forex kitty which swelled to USD 350.80 billion for the week ended October 2. The reserves had declined by USD 2.04 billion to USD 349.97 billion in the week ended September 25.

Furthermore, the data furnished by the RBI in its weekly statistical supplement showed that the foreign currency assets (FCAs) had gained by USD 2.22 billion to USD 329.51 billion in the week under review.

The FCA constitutes the largest component of India's Forex reserves. It consists of US dollars, major non-dollar currencies, securities and bonds bought abroad.

"The dollar in the week under review, had depreciated by close to 1 percent against major global currencies. This added around USD 1 billion to the FCA," Banerjee said.

The Indian reserves consist of nearly 20-25 percent of non-dollar currencies. The individual movements of these currencies against the dollar impacts the overall reserve value.

Besides, currency movements, increased inflows into the equity markets supported the Forex's upwards trajectory.

During the week ended October 9, the barometer 30-scrip sensitive index (S&P Sensex) of the Bombay Stock Exchange (BSE), rose 858.56 points or 3.17 percent to 27,079.51 points.

The wider 50-scrip Nifty of the National Stock Exchange (NSE) too made gains during the weekly trade ended October 9. It rose 238.8 points or three percent to 8,189.70 points.

"Rising equity markets, increased inflow of foreign funds and appreciating rupee have had a positive impact on the reserves," Hiren Sharma, senior vice president, currency advisory at Anand Rathi Financial Services, told agency.

"RBI may have entered into the markets to stabilise the rupee. RBI is seen not to be comfortable with the rupee appreciation."

During the week under review, the country's gold reserves remained stagnant at USD 18.15 billion. The country's gold reserves had risen by USD 116.5 million to USD 18.15 billion during the week ended October 2.

The special drawing rights (SDRs) in the week under review were higher by USD 30.4 million at USD 4.07 billion.

The country's reserve position with the International Monetary Fund (IMF) edged up by USD 10.5 million to USD 1.32 billion.