Forex reserves up $1.88 bn, first rise in 9 weeks

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. The rise is 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 today, foreign currency assets went up by $1.99 billion to $238.97 billion during the week, when special drawing rights (SDRs) remained unchanged in the reserve, whereas gold dipped by $ 521 million. The reserve position in the IMF rose by $411 million to $854 million.

“Exporters 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. In the week ended September 19, forex reserves rose by $153 million to $291.97 billion.
 

MONEY MOVEMENT
Date	Forex reserves ($bn)
Dec 28, ‘07	275.56
March 28, ‘08	309.16
May 23, ‘08	316.17
Sep 12, ‘08	289.46
Sep 19, ‘08	291.97
Sep 26, ‘08	291.82
Oct 3, ‘08	283.94
Oct 10, ‘08	274.00
Oct 17, ‘08	273.88
Oct 24,’08	258.41
Oct 31, ’08	254.88
Nov 7, ‘08	251.38
Nov 14, ‘08	246.34
Nov 21, ‘08	245.80
Nov 28, 08

247.68 Source: RBI

The 1.88 billion increase is the largest since the $2.09 billion rise during the week-ended May 23, when forex reserves touched an all-time high of $316.17 billion.

From the peak, the reserves are down $68.48 billion. India’s forex 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.

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

The rupee depreciated by 0.18 per cent to 50.11 on November 28 from 50.02 on November 21.