With capital inflows rising sharply in the last two months,Indias foreign exchange reserves breached the $300 billion mark for the first time since 2008 with an addition of $2.2 billion last week on the back of a healthy rise in foreign currency. The forex rise to $300.21 billion puts India,which has attracted $35 billion of foreign fund flows in capital markets alone this fiscal,in a select group of countries like China,Japan and Taiwan that have forex reserves exceeding $300 billion. Indias foreign exchange reserves had earlier touched $300 billion in March 2008,before the setting-in of the global slowdown in September that year. The Sensex is up 15.4 per cent so far this year,helped by net $28.5 billion foreign fund inflows into equities. More than half of this investment has arrived since the start of September,driving up the 30-share BSE index 12.1 per cent since then. The rupee has also appreciated significantly due to the heavy inflows. The RBI had indicated that capital flows so far have been manageable due to the current account deficit. However,any steep rise in further flows could invite some measures to moderate the flows. The countrys total forex reserves had stood at $297.96-billion the week before. Foreign currency assets,the largest component of the forex kitty,grew by $2.19-billion to $271.29-billion for the week-ended November 5,the Reserve Bank said in data released today. Foreign currency assets expressed in US dollar terms include the effect of appreciation or depreciation of the non-US currencies,such as the euro,pound and yen,held in the reserves,the apex bank said. After surging by $1.15 billion the week before,the countrys gold reserves were static at $21.67 billion in the reporting week,the RBI said. Indias Special Drawing Rights (SDRs) moved up by $43 million to $5.23 billion for the week,while the countrys reserve position in the International Monetary Fund was also up by $22 million to $2.035 billion,the RBI data showed.
