| Date: |
09-05-2015 |
| Subject: |
Forex kitty swells by $7.3 bn to hit new record of $352 billion |
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KOLKATA: India's foreign exchange reserves have crossed $350 billion for the first time as Reserve Bank of India added on a massive $7.263 billion to its kitty in a single week ending May 1, taking advantage of steady dollar inflows despite some sell-off in the equity markets
The reserves stood at $351.869 billion at the end of the reporting week, RBI said in its weekly statistical update.
Foreign currency assets, which constitute bulk of the reserves and reflect the change in the value of reserves held in other global currencies, including the euro, pound and yen due to exchange rate movements, rose $6.889 billion to $327.153 billion.
RBI does not give any reason behind the surge, but forex dealers said the rise was largely on account of the valuation changes amid dollar's rising strength. The country's foreign currency cushion against external shocks grew by $32.63 since January 2 with foreign investors pumping in dollars in the hope of earning better returns from an economy which showed promise, backed by a growth-oriented government which went about clearing stalled projects.
The size of stalled projects has come down to Rs 5-6 lakh crore now from the earlier Rs 8 lakh crore, RBI Governor Raghuram Rajan said a month ago.
Bank of America Merrill Lynch predicted last month that RBI would buy $62.5 billion in the next 12 months to keep the rupee competitive.
The rupee, however, came under pressure this week in tandem with the losses in equity markets. The partially convertible currency hit a low of 64.25 Thursday, the lowest since September 2013.
Source : economictimes.indiatimes.com
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