Forex reserves $2 billion

May 31, 2008 by Prakash Dhawan · Leave a Comment
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Foreign exchange reserves rose $2 billion during the week ended May 23, though the central bank sold dollars during the week to meet importers demand. According to the latest figures released by the Reserve Bank of India in its weekly statistical supplement (WSS), total foreign exchange reserves including gold and special drawing rights (SDR) rose $2,090 million during the week ended May 23.

Almost the entire growth in reserves during the week has been on account of the growth in assets which went up $2,085 million. Reserves with the IMF rose $5 million, though the value of SDRs and gold in reserves remained unchanged during the week.

The central bank reportedly sold dollars during the week to meet oil importers demand. Besides, the dollar also strengthened vis-a-vis major currencies during the week. However, foreign currency assets expressed in dollar terms also includes the effect of appreciation/depreciation of non-dollar currencies (such as euro, sterling, yen) held in reserves.

The $2 billion pile up in reserves has resulted in infusion of rupee funds worth Rs 15,044 crore during the week. Though that helped ease liquidity conditions during the week, it tightened in the subsequent week.

But, the reserve money of which foreign currency assets is a major sources dipped Rs 42,439 crore during the week on account of a Rs 44,176 crore dip in the net RBI credit to the government during the week.

In the other developments, the government did not resort to any ways and means advances (WMA) — temporary overdraft to meet revenue mismatches during the week. States have reduced their reliance on WMA by Rs 215 crore taking the WMA outstanding with the central bank to Rs 303 crore as on May 23.

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Rupee ends

May 26, 2008 by Prakash Dhawan · Leave a Comment
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The Indian rupee ended slightly cheaper at 42.72/73 against the greenback on Monday on month-end dollar demand by oil companies, amid continued weakness in Asian stocks. Local currency fluctuated in a wide range of 42.7950 and 42.53 during the day after resuming weak at 42.7900/7950 a dollar from its last close of 42.71/72 a dollar. Dealers said the rupee attempted a smart rally and touched the day’s high of 42.53 in early trade due to heavy dollar selling by foreign banks. Global crude oil was trading above 133 dollars a barrel in Asian trade on Monday, Asian stocks were under tremendous pressure and stayed weak for the last few days on fears that high inflation rate and weakness in the US economy.
Sensex lost 301 points to touch the six-week low of 16,348.50 points Meanwhile, the Reserve Bank fixed the reference rate for US dollar at Rs 42.56 and that for single European unit at Rs 67.08.

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