The Hindu Business Line : FII, trade flows push up forex reserves $771 m

Despite the cap on NRE deposits, dollar inflows continue into the country unabated. "Most of the inflow is on account of FIIs and trade flows. NRI inflows are still there but it has reduced considerably, said the chief dealer in a private bank.

There might have been an increase in the value of the investment portfolio of the apex bank too at the time. US yields had gone down and this would have led to a rise in value.

The euro had risen during the week, but the dollar had slid down so it there would not have been much change in the valuation of the basket of currencies held by the RBI.

According to the latest statistics, foreign currency assets rose by $771 million while gold and special drawing rights were steady at $3.720 billion and $4 million respectively.

The week gone by witnessed a sharp appreciation of the domestic currency by over 44 paise to end the week at a 38-month high of 45.3850/3950 against the dollar. Good FII inflows continued during the week while RBI permitted the rupee to appreciate.

The maturing of $5.5-billion Resurgent India Bonds sailed through smoothly without having any significant impact on the local financial markets.

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