Forex reserves up $1.88 bn at $247.69 bn

After falling for nine weeks in a row, India’s foreign exchange reserve rose by $1.88 billion to $247.69 billion during the week-ended November 28, 2008 partly due to revaluation of currency and lesser intervention by the Reserve Bank of India (RBI) in the foreign exchange market.

According data released by RBI, the foreign currency assets went up $1.99 billion to $238.97 billion during the period.

“Exporters have brought in dollars (during the week under review) and this helped boost the reserves. Lesser intervention by RBI also helped though it is too early to assess whether the trend (of falling reserves) has reversed,” said a dealer with a public sector bank.

This is the first time since the week-ended September 19 this year, when reserves have gone up. During the week-ended September 19, foreign exchange reserves rose $153 million to $291.97 billion. The $1.88 billion increase is the largest since the $2.09 billion rise during the week-ended May 23, when foreign exchange reserves touched an all-time high of $316.17 billion.

From the peak, the reserves are down $68.48 billion. India’s foreign exchange reserves have fallen over $62 billion since the end of March mainly on account of heavy intervention by RBI in the foreign exchange market to check a steep depreciation of the rupee against the dollar.

Despite RBI’s intervention, the rupee has fallen over 26 per cent against the dollar since January. Today, it gained for the fourth successive day to close at 49.60 against the greenback, compared with 49.85 yesterday. On Tuesday it had touched a lifetime low of 50.65 against the US currency.

The rupee depreciated 0.18 per cent to 50.11 level on November 28 from 50.02 on November 21. During the same period, special drawing rights (SDRs) remained unchanged in the reserve whereas gold dipped by $521 million. The reserve position in the International Monetary Fund rose by $411 million to $854 million.

During the week-ended November 28, FIIs were net sellers to the tune of $81 million in the equity market though the Bombay Stock Exchange Sensex went up by 1.99 per cent. The demand for dollars from foreign banks increased last Friday in the wake of terrorist attack in Mumbai.