Forex reserves fall $187.6 million

The Reserve Bank of India (RBI)'s foreign exchange reserves fell $187.6 million for the week ending July 31 to $353.46 billion, show data released on Friday.

Foreign currency assets rose $629.9 million to $329.88 billion.

During the week, gold reserves recorded a sharp fall of $824.2 million to $18.25 billion. The drop was due to a fall in prices of the yellow metal. Gold reserves as a percentage to total reserves are almost at a six-year low due to the drop. These stood at 3.8 per cent for the week ending October 30, 2009, and are currently at 5.16 per cent.

Special Drawing Rights rose $4.9 million to $4.03 billion, while India's reserve position with the International Monetary Fund stood at $1.31 billion, a rise of $1.7 million.

Meanwhile, on Friday, the rupee ended at 63.82 to the dollar compared with its previous close of 63.77. It opened at 63.77 and during intra-day trade, touched a high of 63.76 and a low of 63.85. The weakness was due to dollar buying by banks and importers on weak cues from global markets.

The weakness in the rupee might continue next week, as currency dealers believe foreign flows to domestic markets could get slow. The appreciation in the rupee earlier this week was mainly on account of foreign flows in domestic markets. There are also concerns that the US Federal Reserve would soon start raising interest rates, as a result of which there would be outflows from emerging markets like India.