The Hindu Business Line : Forex reserves rise $1 b, top $112-billion mark

STRONG dollar flows, especially on March 31, from portfolio investors added another billion dollars to the burgeoning foreign exchange kitty of the Reserve Bank of India during the week ended April 2.

A merchant banker said some foreign investors had brought in large funds on March 31 to pay for their purchases of ONGC shares in the Government's equity sale.

The RBI's Weekly Statistical Supplement said the country's forex reserves rose $1.068 billion to $112.69 billion during the last three days of the past financial year and the first two days of the new one.

SEBI data of April 1 showed that foreign institutional investors brought in $768 million. The data put out by the market regulator comes with a day's lag, which means the money came in on March 31, the last day of the fiscal year. According to the data, FII flows were over $1.25 billion during the week ended April 2.

Besides the FII flows, the rupee's movement against the US currency has also affected the reserves. At close on Thursday (Friday was a holiday), the rupee traded at 43.6250 per dollar or about five paise stronger than when it began the week at 43.67/68. Even though the RBI intervened during the week through State-owned banks to check the steep rise of the rupee, strong flows evened out the efforts.

Meanwhile, the RBI sold a first tranche worth Rs 5,000 crore of market stabilisation bonds, the latest weapon in its armoury, on Tuesday. The issue was a huge success attracting bids of over Rs 12,000 crore. Even though, the bonds helped stall the rupee's rise on that day, the Indian currency resumed its upward trend with a gain of 20 paise on the very next day.