Forex reserves up a tad to $293 bn

India’s foreign exchange reserves grew marginally by $732 million to $293 billion for the week ended January 20.

According to the Reserve Bank of India, the reserves grew due to revaluation in the foreign currency assets. These increased by $705 million to $259.5 billion, inclusive of the rupee appreciation against the dollar. The rupee appreciated by 2.4 per cent between January 13 and January 20.

Experts give credit to the inflow of dollars through the equity market. The net inflow in the FII equity market for the reporting week was $795.79 million according to the Sebi website.

While gold reserves remained unchanged at $27 billion, Special Drawing Rights (SDR) and the reserve position in the International Monetary Fund (IMF) rose by $17 million and $10 million, respectively. The SDRs stood at $4.4 billion and the reserve position in the IMF was $2.7 billion. The foreign exchange reserve saw an increment after four weeks after touching a 13-month low for the week ended January 13.

Some bankers were of the view that the effect of steps taken by RBI in the past few months to enhance dollar inflow may be showing. The regulator had taken a slew of measures like freeing up of interest rates on the NRE and NRO deposits, direct dollar sale, enhancement of the ECB limit under the automatic route and increasing FIIs’ investment limit in government and corporate bonds.