The Hindu Business Line : Forex reserves surge by $1.5 b

A revaluation in RBI's basket of currencies, coupled with strong foreign funds inflows, led the country's forex reserves to rise by over $1.5 billion for the week ended November 19.

According to the latest statistics released by RBI, India's forex reserves grew by a whopping $1.560 billion to $125.098 billion during the week. This is the third consecutive week when reserves grew by over a billion dollars.

Foreign currency assets increased by $1.551 billion to $119.396 billion. As per RBI's Weekly Statistical Supplement , foreign currency assets expressed in US dollar terms include the effect of appreciation or depreciation of non-US currencies such as the euro, sterling and yen held in reserves.

"Major international currencies, especially euro, gained in strength against the dollar during the week, which led to revaluation gains for the central bank," said a treasury head of a large private sector bank. "Liquidity support by RBI as it bought dollars in the domestic foreign exchange market and sold the rupee, also led to reserve accretion, coupled with foreign investment inflows," he added.

According to data from SEBI, net foreign investments during the week were to the tune of $440.50 million. Meanwhile, the Reserve Tranche Position in the International Monetary Fund went up by $9 million to $1.346 billion, while the Gold and Special Drawing Rights (SDRs) position remained unchanged.

In the liquidity adjustment facility window, RBI injected funds in the system ranging from Rs 13,780 crore to Rs 17,235 crore during the week.

In the domestic forex market, the rupee hovered between 45.0300 and 45.0750. The domestic currency also touched a high against the greenback at 44.75. While foreign inflows were substantial, major international currencies continued to appreciate against the dollar. The trend of the dollar's weakness against international currency majors and the rupee, lead to an appreciation in the home currencies, dealers said.