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Our Bureau

Mumbai, Aug. 22 The country’s foreign exchange reserves fell to $296 billion for the week ended August 15, from $300 billion in the previous week.

Forex reserves had crossed the $300-billion milestone for the first time in February 2008. The reserves rose to a high of $316 billion in May but have depleted since then as the RBI has been selling dollars.

Treasury officials said that in the past few months, the RBI offered dollars in exchange of oil bonds to public sector oil companies, under its special market operations. The central bank also sold dollars to intervene in the forex market.

For the week ended August 15, the reserves fell by $3.8 billion, against a drop of $5.46 billion in the previous week.

Foreign currency assets fell by $3.78 billion to $285.97 billion. Foreign currency assets expressed in US dollar terms include the effect of appreciation as well as depreciation of non-US currencies (such as euro, sterling and yen) held in the reserves.

“The fall in reserves during the week may have been due to foreign institutional investor outflows,” said a senior treasury official at a private sector bank. FII outflows during the week under consideration were $252 million.

There may have also been a marginal revaluation effect as the euro fell from $1.49 to $1.48 against the dollar during the week.

Gold remained unchanged at $9.73 billion during the week under consideration. SDRS fell by $7 million to $4 million and the country’s reserve position in the IMF also dropped by $8 million to $496 million.

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