The Hindu Business Line : Forex reserves up $332 m

THE country's forex kitty was fortified by $332 million for the week ended October 15, to $119.636 billion, against $119.304 billion in the previous week, as per the latest RBI statistics.

Analysts ascribed the rise in reserves to a $326 million rise in foreign currency assets, which stood at $114.135 billion, coupled with a $6 million rise in the reserve position with the IMF.

"Foreign currency assets expressed in US dollar terms include the effect of appreciation and depreciation of non-US currencies such as euro, Sterling and yen held in reserves," according to the Weekly Statistical Supplement of the Reserve Bank of India.

Gold reserves remained steady at $4.192 crore, while special drawing rights were steady at $1 million.

During the week, the amount parked in repos with the RBI ranged between Rs 9,520 crore and Rs 12,030 crore.

After closing at 45.8506 against the dollar on Monday, the domestic currency ended around 12 paise stronger on Thursday, at 45.73 per dollar amid good dollar supplies. The domestic financial markets remained closed on Friday, on account of a public holiday.

Dealers said good dollar supplies emanating from FII flows, exporters selling and other flows are strengthening the rupee.

Although the markets are rife with concerns over the hardening in international crude-oil prices, the rupee has been supported by good dollar flows during the week, dealers said.

"All eyes will be on the mid-term review of the monetary and credit policy on Tuesday. Aside from any measures to be announced to manage the inflation rate, market players will look for some clues in the central bank's commentary on the economy and interest rates," said a dealer with a private sector bank.

The domestic debt market has been witnessing some liquidity pressure, as indicated by the hardening of inter-bank call rates over the past couple of days.

Call rates surged to 5.10 per cent levels, on significant demand for funds from banks, after hovering at a benign 4.25-4.60 per cent for most of last fortnight.

Bond market players are also abstaining from building positions ahead of the monetary policy announcement on Tuesday.