Financial Daily from THE HINDU group of publications
Sunday, May 19, 2002
Money & Banking - Forex
Forex reserves up $92 m at $55.71 b
MUMBAI, May 18
THE country's forex reserves have risen by $92 million to touch $55.712 billion for the week ended May 10, as compared to $55.620 billion in the previous week, according to the Weekly Statistical Supplement of the RBI.
Forex dealers said that a slowdown in the rise in reserves is probably due to depressed FII dollar inflows over the last couple of weeks.
The Indian currency has been volatile over the past week triggered by tensions on the border. On Thursday the rupee slipped to its all time low, intra-day, at 49.07/08 on the back of some panic dollar covering by importers.
However, nationalised banks have been selling dollars whenever deemed necessary to offset the demand. The rupee ended the week at 49.01/02.
Forex dealers said that the currency was weakening only on account of apprehension of a possible war.
"Reserves are at comfortable levels and there is no real factor that should keep the rupee down except the sentiment now. In fact the dollar is weaker against international currencies, so the apex bank will not want the rupee to depreciate too sharply at this point,'' said an analyst.
However, the near term outlook for the rupee is bearish as the currency is likely to be bogged down by political uncertainties over the next week, said dealers.
Meanwhile, according to the W.S.S., foreign currency assets have gone up by $92 million to touch $52,569 billion. Gold reserves remained unchanged at $3.131 billion. Special Drawing Rights (SDRs) remained steady at $12 million.
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