Forex reserve dips $1.8 bn

India’s foreign exchange reserve fell by $1.83 billion to $245.86 billion for the week ended December 5 due to revaluation in international currencies, heavy pullout by foreign institutional investors and the Reserve Bank of India’s (RBI) intervention to stall the sharp depreciation of rupee.

Meanwhile, RBI sold a net $18.66 billion in October, highest in the 2008-09 financial year, to stem a sharp fall in the rupee against the US currency. It bought dollars worth $1.96 billion and sold $20.62 billion in October. Cumulatively it has sold $28.31 billion till October end in FY09, according to the RBI monthly bulletin.

 

The foreign currency assets declined $1.82 billion to $$237.15 billion during the week. In rupees terms, the reserve fell by Rs 12,682 crore to Rs 12,21,778 crore. Gold and SDRs in the reserve remained unchanged. The reserve position with the International Monetary Fund (IMF) dipped $9 million. India’s foreign exchange reserve is fifth largest in the world only after China, Japan, Korea and Russia.

During the period, FIIs sold $321.20 million in the equity market. The Bombay Stock Exchange (BSE) fell 1.4 per cent to 8965.20.

“In the coming week, we can expect slight rise in the foreign exchange reserve as FIIs have been net buyers to the tune of $321.20 million” added a dealer from a public sector bank.