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Our Bureau

Mumbai , Dec. 6

AIDED in part by a revaluation of the Reserve Bank's basket of international currencies, the country's forex kitty was enhanced by a modest $ 698 million this week, as compared to an increase of $ 1.710 billion in the previous week.

Forex reserves are high at $ 96.071 billion for the week-ended November 28, as compared to $ 95.373 billion in the previous week. Foreign currency assets have also grown by $ 698 million during this period to touch $ 92.148 billion, as per the latest RBI statistics.

"Foreign currency assets expressed in dollar terms include the effect of appreciation or depreciation of non-US currencies (such as euro, sterling, yen) held in reserves," according to the Weekly Statistical Supplement of the RBI.

Currency experts attribute the huge surge in reserves last week largely to the RBI's aggressive mopping up of dollar liquidity in the first three weeks of November.

According to Mr R.V.S. Shridhar, Head-Forex, UTI Bank, "The market witnessed an enormous amount of dollar buying by the RBI in the initial weeks of last month. However, in the last week of November, it appears that the RBI has relaxed the aggressive bout of buying and let go of the rupee to some extent."

"Even on the real effective exchange rate basis, the rupee is sufficiently undervalued by around 1.25 per cent. So going forward one can safely conclude that the rupee is once again on a trend of appreciation. Of course, to a large extent this is dependent on the RBI's stance in the market, which is unpredictable," he said.

Meanwhile, the rupee ended the week stronger at 45.6050 per dollar on Friday, strengthening by around 13 paise after opening the week on Monday at 45.72/73. The domestic currency remained range-bound throughout the week. In the forwards market, the premia closed slightly firmer on Friday. The six-month premium closed at 0.01 per cent, as opposed to a `discount' closing on Thursday at - 0.89 per cent. The one-year premium closed at 0.24 per cent (0.17 per cent).

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