Forex reserves fall by another $ 287 mn

MUMBAI, JULY 29: The fall in India's foreign currency reserves is continuing unabated. Forex reserves dropped by $287 million to $36,285 m...

MUMBAI, JULY 29: The fall in India’s foreign currency reserves is continuing unabated. Forex reserves dropped by $287 million to $36,285 million for the week ended July 21, 2000 over the previous week.

With this, forex reserves have fallen by nearly $ 1.7 billion in the last three months. In the week ended July 14, the reserves were down by $95 million to $36,752 million. The fall in reserves was on account of foreign currency assets falling by $287 million to $33,329 million, according to the Reserve Bank of India’s weekly statistical supplement.

The country’s gold and special drawing rights (SDRs) were static at last week’s levels of $2,948 million and $8 million respectively. “Persistent dollar demand from foreign funds and importers partly capped the rupee’s gains,” a forex dealer said. Dollar demand from foreign funds remained the major factor for the forex market as they were net sellers on the local bourse.

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Foreign institutional investors have pulled out over Rs 1,000 crore in the month of July alone. “One reason for the FII pullout is that interest rates are going up in the US and other western markets. So FIIs are withdrawing funds from Asian markets,” said an analyst.

The withdrawal of funds by FIIs led to the rupee fall in the last week. The rupee had plunged to historic-lows of 45.0709 in intra-day trade on July 21 before closing at a record-low of 45.01/03.

The Indian unit ended at 44.87/88 per dollar, a sharp recovery from previous weekend record-lows of 45.01/03 following an early intra-week peak of 44.70/75 on the back of the liquidity tightening measures initiated by the central bank late last Friday to check the rupee slide.

Police personnel seen to control the situation during a massive protest over the statehood demand and the inclusion of Ladakh under the Sixth Schedule, in Leh on Wednesday. (ANI Video Grab)

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