Forex reserves rise to $280.19 bn

After a steep fall in the week ended July 5, India's foreign exchange reserves rose a tad in the week ending July 12, shows Reserve Bank of India data released on Friday. The total forex reserves stood at $280.19 billion in the week ended July 12, and during the week it rose by $21.1 million. Foreign currency assets rose to $252.136 billion, a rise of $33.5 million during the week. Gold reserves remained unchanged.

For the week under review, Special Drawing Rights rose $6.7 million to $4.33 billion, while India's reserve position with the International Monetary Fund was down by $19.1 million to $2.16 billion.

Bloomberg data shows reserves rose for the first time since June 14. The recent fall in reserves was due to RBI intervening in the forex market to arrest the volatile rupee which had also touched an all-time low of 61.22 in the recent past.

However, currency dealers opine forex reserve may again start falling as the rupee is expected to weaken in the near-term.

RBI governor D Subbarao said earlier this week RBI intervenes in the forex market to smooth excess volatility. "We let our exchange rate be largely market determined, but intervene in the market to smooth excess volatility and/or to prevent disruptions to macroeconomic stability," he had said.

Meanwhile, the rupee ended at Rs 59.35 on Friday compared with previous close of Rs 59.68. It had opened at Rs 59.72 and during intra-day trades it touched a high of Rs 59.30 and a low of Rs 59.87.

According to currency dealers the rupee ended strong on Friday because state-run banks had intervened in the market on behalf of RBI. There is month-end dollar demand from importers which is keeping the rupee under pressure.