The country’s foreign exchange reserves surged by $14.72 billion in the week ended November 11, the biggest weekly jump in the last 15 months, as the
The country’s foreign exchange reserves surged by $14.72 billion in the week ended November 11, the biggest weekly jump in the last 15 months, as the Reserve Bank bought dollars from the spot market and due to revaluation gains. The reserves stood at $544.715 billion in the reporting week, RBI data showed on Friday. It had risen by $16.63 billion in the week ended August 27, 2021.
“RBI has been buying dollars at levels below 81.50 from the spot market,” said Anindya Banerjee, vice president – currency derivatives & interest rate derivatives, Kotak Securities Ltd. The rupee has appreciated in the last few sessions as the dollar has weakened on hope the US Federal Reserve may moderate the pace of its rate hikes.
The rupee fell 6 paise to end at 81.70 against the USD on Friday, compared to previous close of 81.64. So far in November, foreign portfolio investors have pumped in Rs 30,385 crore, or $3,709 million, in Indian equities, the latest NSDL data. According to IFA Global founder Abhishek Goenka, the increase in forex reserves was predominantly on account of revaluation impact of gold and currencies other than US dollar. “Between November 4 and 11, Euro, Pound and Yen appreciated 4-6 per cent against the dollar.
Gold had appreciated about 5 per cent during the same period. All of this is likely to have resulted in a cumulative revaluation impact of about $9 billion,” he said.
The dollar index, which is a measure of the value of the greenback relative to a basket of six foreign currencies, has fallen from 114 in September to 106 currently. A fall in the dollar index shows the dollar has depreciated against major currencies.
During the reporting week, the foreign currency assets (FCA), a major component of the overall reserves, increased by $11.8 billion to $482.527 billion.
Movements in the FCA occur mainly on account of purchase and sale of foreign exchange by the RBI, income arising out of the deployment of the foreign exchange reserves, external aid receipts of the central government and changes on account of revaluation of the assets.
The gold reserves increased by $2.63 billion to $39.69 billion in the week, the RBI data showed.
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