The Hindu Business Line : Forex reserves increase by $464 million

THE country's forex reserves have risen by $464 million to touch $109.596 billion for the week ended March 12, 2004, as against $109.132 billion in the previous week, as per the latest RBI statistics.

The rise in reserves was mainly due to a corresponding rise in the central bank's foreign currency assets, which also increased by $464 million to touch $105.404 billion during the week.

Foreign currency assets with the RBI reflect the effect of appreciation or depreciation of non-US currencies such as the euro, sterling and yen held in reserves.

Dealers said, although the equities market has been going through a dull phase this past month, FII investments into the country have not shown signs of slowing down.

"There is a good amount of dollar liquidity in the market and although it is difficult to pinpoint how much intervention takes place in the market, one can guess that the RBI mops up anywhere between $300 and $500 million on a weekly basis. But it is difficult to say this with a certainty", said a dealer with a private sector bank.

The domestic currency ended the week steady at 45.20 per dollar in an otherwise lacklustre forex market. It remained in a narrow range throughout the week.

"There is hardly any dollar demand and the supplies are steady. In this scenario, there is not much scope for any significant movement in the rupee", dealers said.

Meanwhile, according to the weekly statistical supplement of RBI, gold reserves remained steady at $4.190 billion, while special drawing rights were at $2 million.