The Hindu Business Line : Forex kitty grows $696 m

Mumbai, Jan. 11 The foreign exchange reserves rose by $ 696 million to touch $2.76 billion for the week ended January 4, due to an increase in foreign currency assets.The reserves had increased by $2.837 billion in the previous week ended December 28, 2007.

“The central bank could have been intervening and buying dollars in the forex market to prevent the appreciation of the rupee. But the dollar flows were less since it was the year-end and New Year week,” said forex dealer at a private bank.

Foreign currency assets increased by $724 million to $2.67 billion.

Forex dealers said there could have also been some revaluation effect as both the euro and the Japanese yen appreciated against the dollar.

The euro moved form $1.4590 to $1.4740 during the week under consideration. The yen moved up from 111.33 yen to 108.50 yen.

Foreign currency assets, as expressed in dollars, include the effect of appreciation or depreciation in non-US currencies (euro, sterling and yen) held in reserves.

The gold reserves declined by $29 million to $8.328 billion while SDRs remained unchanged at $ 3 million. The country’s reserve position in IMF rose by $1 million to $ 433 million.