The Hindu Business Line : Forex reserves rise by $588 m

THE forex reserves of the country have risen by $588 million to touch $77.598 billion for the week ended May 2, 2003 up from $77.010 billion in the previous week.

While foreign currency assets rose by $733 million to touch $74.205 billion, gold reserves have fallen by $145 million to touch $3.389 billion, according to the latest RBI statistics.

In the previous week ended April 25, the forex kitty had surged by $1 billion.

Meanwhile, in the forex market, the rupee was seen surging by over 11 paise in the week gone by to close at 47.1800/1900 against the dollar. The dollar has been taking a beating in its value against all major international currencies and is therefore seen losing against the rupee too.

"Exporters' receivables and NRI remittances are further adding strength to the rupee by way of heavy dollar inflows,'' said currency traders.

The rupee is forecast to touch the 46.00 mark with the dollar and the US economy showing no signs of recovery, said the treasury head of a private sector bank.

In the forwards market, historic lows were touched with the six months forward contract for the dollar diving below the 1 per cent mark mid-week. However on Friday, the six months premium recovered to close at 1.31 per cent (annualised rate) on what is perceived to be intervention by the central bank.

Forward premia have been plummeting in the recent months with exporters heavily selling forwards and importers refraining from covering their positions, all punting on the appreciation of the Indian rupee.

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