India’s foreign exchange reserves rose to a record $89.33 billion on September 26, on strong investment inflows and some dollar weakness. However, the reserves would have fallen since because of a big redemption in Resurgent India Bonds (RIBs).Forex analysts say it’s only a matter of weeks for the reserves to cross the $90 billion mark. Data released by the Reserve Bank of India on Saturday showed the reserves, Asia’s sixth largest, rose by $771 million over the week and were up by more than $19 billion so far in 2003.Foreign fund investment in stock market was a major factor. “The fall in the dollar against other currencies such as the euro and yen, in which a part of the reserves are, held would also have boosted the overall (dollar) value of the reserves,” said an analyst.Foreign fund investments in Indian shares surged this year with a robust economic pick-up expected after the farm-driven economy, Asia’s third largest, got its best rains in five years. Their investments totalled more than $3 billion between January and September, four times the $740 million invested throughout 2002. The dollar also fell that week after the Group of Seven called for more flexible exchange rates. Trade inflows by way of exports of services have added to the stream of inflows flowing into the country.
