The Hindu Business Line : Forex reserves surge by $899 m

THE foreign exchange reserves of the country increased by $899 million to $107.506 billion for the week ended February 13, up from $106.607 billion the previous week.

According to the latest weekly statistical supplement released by the Reserve Bank of India, foreign currency assets increased by $900 million to touch $103.215 billion while special drawing rights decreased by $1 million to $2 million and gold reserves were steady at $4.289 billion.

According to forex experts, the increase in the reserves is due to the absorption of dollar supplies by the central bank. "There has been steady supplies of the greenback throughout the week through FIIs, export receivables coming into the market and also by overseas borrowings of corporates," said Mr Moses Harding, Executive Vice-President, IndusInd Bank.

The expectation is that dollar supplies are likely to continue and only accelerate with more companies accessing the overseas market, he added.

In the dollar-rupee market, the Indian currency appreciated by a mere three paise in its value against the dollar through the week to end at 45.2550/2600 on Friday. The forward premia on the dollar increased by 10-20 basis points through the week with the six months premia ending the week at 0.39 per cent and the one-year contract ending the day at 0.49 per cent.

The forecast indicates a steadily stronger rupee with a section of forex dealers betting on 45.10 by March-end.