Forex reserves surges $1.9 billion in week to May 2.

KOLKATA: India's foreign exchange reserves jumped by $1.9 billion in the week to May 2 with overseas investors pumping in dollars in the local bourses as a possibility of a strong and stable government improved market sentiments.

Reserve Bank of India statistics showed that reserves stood at $311.858 billion, getting closer to an all-time high of $321 billion.

The nine-phase Lok Sabha elections is drawing to an end on May 12 and the result will be out on May 16. Opinion polls have put Narendra Modi-led Bharatiya Janata party ahead of the ruling Congress and the market is anticipating that BJP may get a majority or come close to it. The BSE Sensex closed 2.91% higher at 22,994.23 points Friday, its biggest daily gain since September.

There has been a relentless surge in reserves every week since February 21 this year, except for a minor dip in the week to April 18, as foreign institutional investors poured in investments expecting a pro-reform government.

There was a minor blip in dollar flow in the middle of April when FIIs turned sellers in local debt market breaking three months buying spree as they held back on reinvestment. The banking regulator has barred FIIs from investing in T-bill, short term government securities.

Source : economictimes.indiatimes.com​