The Hindu Business Line : Forex reserves up $772 m

THE foreign exchange reserves of the country increased by $772 million to touch $109.132 billion for the week ended March 5, up from $108.36 billion in the previous week.

According to the latest weekly statistical supplement released by the Reserve Bank of India on Saturday, the foreign currency assets increased by $871 million to touch $104.94 billion while special drawing rights was steady at $2 million and gold reserves declined by $99 million to $4.19 billion.

Good dollar inflows were seen in the foreign exchange market during the week through FII and exporter receivables. A lot of it must have been mopped by the central bank thereby explaining the accretion to the reserves, said a forex dealer from a foreign bank.

In the dollar-rupee market, the expectation that the Indian rupee will appreciate in the medium term but how it behaves in the short term will depend on the dollar's movement against other international currencies.

During last week the dollar gained some of its lost strength against international majors and steadied the Indian currency.

The rupee was steady last week moving within a narrow band of four paise. It ended on Friday at 45.2550/2600 in its value against the dollar.

The forward premia on the dollar also witnessed limited activity with lacklustre trading and exporters' buying interest.

The six-months forward closed at 0.34 per cent on Friday and the one-year forward at 0.44 per cent.