The foreign exchange of India fell to $375 million during the week that ended Feb 26th 2010 and went onto touch the $278.4 billion mark. The main reason citied for this was that the non dollar assets were revalued on account of the dip in the gold reserve value.
The latest report of data that was released by the Reserve Bank of India (RBI) for both its foreign currency assets and also the gold value in its reserves had fallen to $212 million and also $136 million respectively. On the other hand the Special Drawing rights (SDR) which was also the reserve currency with the IMF had also risen by $26 million and $7 million respectively.
In the international market, the gold prices had also fallen mostly during the month of Feb where the gold reserve value that is revalued monthly depending on what it was at the London Bullion Exchange also fell. The impact that the variation gold prices was now very significant after the RBI had increased in its gold holding after it had followed the purchase of $200 tonnes of gold from the IMF in November last year.
The foreign currency assets that had dipped during the week was mainly because of the rising dollar value against the EUR. This was also the reason why the non dollar assets like the euro, yen and sterling etc were revalued since they were in the form of dollars and was mainly for the treasury official which was at the public sector bank.
Source : forex-flash.com