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Forex reserves surge by $3 b

Our Bureau

Mumbai , Aug. 6

THE country's forex reserves surged by over $3 billion — the highest in 16 months — for the week ended July 29 due to strong inflows and euro appreciation.

As per RBI's Weekly Statistical Supplement, the reserves increased by $3.062 billion to touch $140.600 billion from $137.538 billion in the previous week.

Earlier, forex reserves had risen in excess of $3 billion during the week ended April 9, 2004 when they increased by 3.37 billion.

Foreign currency assets increased by $3.066 billion to touch $134.587 billion during the week under consideration. Foreign currency assets expressed in dollar terms include the effect of appreciation/depreciation of non-US currencies (such as euro, sterling, yen) held in reserves.

Gold and SDRs were unchanged at $4.453 billion and $4 million respectively. The country's reserve tranche position in IMF decreased by $4 million to touch $1.556 billion.

In the earlier week, the forex reserves had recorded a minor fall of $23 million.

According to the treasury head of a private bank, the huge rise in the reserves can be attributed to strong inflows into the stock market and euro appreciating against the dollar.

The euro rose by almost 200 points from 1.21$ to 1.23$ in the week under review, he said.

The FII inflow into the equity market during that week was $772.7 million, according to the SEBI Web site.

In the coming week, the rupee is likely to remain in the range of 43.42-43.55, the level at which it is currently trading.

"RBI is absorbing the inflows. There is potential for the rupee to appreciate, but RBI may at least allow it to gain by 5 paise every month," the official said.

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Punjab National Bank ICICI BANK TMB Ltd

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