The Hindu Business Line : Forex reserves jump $1.45 b

STEADY foreign exchange inflows, nearly half of it contributed by portfolio investors, have boosted the country's reserves by nearly $1.5 billion over the past week.

As per the latest RBI statistics, the country's forex kitty stands fortified to $97.520 billion for the week ended December 6, up $1.449 billion from $96.071 billion at the end of the previous week. This is the second time in a month that foreign exchange inflows have topped a billion in a single week. Reserves went up by $1.71 billion in the third week of November.

Currency experts say the reserves are increasing because the RBI has been buying dollars bought in largely by foreign institutional investors to buy Indian equities. SEBI data shows net FII inflow of $715.7 million in the first 10 days of December.

Although the forex reserves appeared set to breach the $100-billion mark by the end of the month, analysts say that would depend on whether dollar inflows are sustained until then. Many analysts say that FIIs usually pull out large part of their funds in December but add that this may not happen in the current year due to the excellent run of many stocks. Sudden pullout of FII money may depress valuations, something that they may not wish to see, said one analyst.

The rupee has been holding steady between 45.52-45.56 against the dollar through the week. It ended at 45.5450/5550 on Friday.

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