Forex reserves over 60bn

India8217;s foreign exchange kitty is swelling as never before. Thanks to the fall in dollar and the rise in the value of euro and yen and ...

India8217;s foreign exchange kitty is swelling as never before. Thanks to the fall in dollar and the rise in the value of euro and yen and sustained dollar buying by the central bank, forex level has crossed the US dollar 60 billion during the week. This indicates a rise of 16.33 billion in the last one year.

Said a forex dealer, 8220;as a result of continued revaluation of the US dollar vis-a-vis the euro, higher export remittances and sustained dollar buying by the Reserve Bank from the open market, forex reserves are soaring.8221; In the reporting week, the forex reserves touched a record high with a rise of 281 million to reach 60.148 billion. In the previous week, the reserves had increased by 261 million.

However, dealers hastened to add that this steep rise in forex levels does not indicate a big jump in foreign direct investment FDI or foreign portfolio investments.

The forex reserves constitute of three components: foreign currency assets, gold reserves and the Special Drawing Rights under the IMF scheme. According to Reserve Bank of India, the foreign currency assets rose by 360 million to 56,887 million during the week. Gold reserves, however, decreased by 82 million to 3,248 million due to revaluation while special drawing rights grew by three million to 13 million, the apex bank stated.

According to forex experts, the continuous indirect intervention by the RBI in the forex market was also one of the main reasons for the rise of the forex reserves. RBI was mopping excess dollar supply from the market through state-run banks in order to stem the rupee8217;s appreciation following the sharp fall of the other currencies against dollar during the week.

However, the fall of the non-US currencies like euro and yen held in the reserves as well as the drop in gold prices limited the increase in forex reserve. During the week, the rupee gained three paise against the dollar to 48.65 from 48.69 of the previous week despite active dollar buying by state-run banks.