The Hindu Business Line : Forex reserves dips $4.3 b on currency devaluation

CURRENCY devaluation has accounted for a decline of $4.3 billion in the foreign exchange reserves of the country between April and June 2005, against $1 billion during the corresponding period in the previous year, said a press release from the RBI.

Currency devaluation reflects the depreciation of major currencies against the US dollar.

While the accretion to the forex reserves was $1.2 billion on a balance of payment basis (excluding valuation effects) during this period, the valuation loss was one of the major reasons for a decline of $3.1 billion in this period.

In the corresponding period in the previous year, forex reserves had increased by $6.6 billion.

In terms of the sources of accretion to forex reserves, foreign investment has registered an increase at $1.9 billion, up from 8 million in the previous year.

NRI deposits have also increased to $2 million, against a fall of 8 million in the previous year.

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