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Our Bureau

Mumbai , Jan. 1

THE country's foreign exchange reserves grew by $394 million to touch $131.016 billion for the week ended December 24, 2004.

However, in rupee terms the reserves recorded a decline of Rs 1,045 crore, as per the latest Reserve Bank of India statistics.

In fact, over the past couple of weeks, although the reserves have grown by $1.31 billion, in rupee terms, they have registered a decline of Rs 4,235 crore.

Although reasons for this phenomenon are not entirely clear, some analysts are of the view that the decline in rupee terms could be because the domestic currency has been steadily appreciating against the greenback in December.

"The rupee has appreciated by over 60 paise against dollar in December alone. This will have some impact on the reserves, as a substantial portion of it is held in dollars and euros. Even foreign currency assets are valued in dollar terms, so it is likely that the reason for the decline of reserves in rupee terms", said a treasury head with a public sector bank.

According to the weekly statistical supplement of RBI, foreign currency assets rose by $383 million to touch $125.049 billion for the week ended December 24. This is inclusive of gold reserves at $4.54 billion and special drawing rights at $5 million.

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Forex reserves up $394 m

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