The Hindu Business Line : Forex reserves fall by over $5 b

Mumbai, Nov. 21 The foreign currency reserves declined by $5.015 billion to touch $246.349 billion for the week ended November 14, 2008, according to the Reserve Bank of India’s latest Weekly Statistical Supplement.

In the earlier week, the foreign currency assets had declined by $1.519 billion to touch $251.364 billion.

For the week under consideration, the foreign currency assets fell by $5.006 billion to $237.521 billion. Foreign currency assets expressed in US dollar terms include the effect of appreciation or depreciation of non-US currencies (such as Euro, Sterling, Yen) held in reserves.

The euro had touched a two-week low of $1.290 against the dollar, as Germany, Europe’s biggest economy, was in recession. This may have led to a fall in the value of the country’s foreign currency assets, said a bank official.

During the week, FIIs sold a net of $324.9 million in the equity market.

As the rupee was strong in the spot market, it was unlikely that the RBI sold dollars, the official added.

For the week under review, gold was unchanged at $8.382 billion. SDRs fell by $6 million to $3 million. The country’s reserve position in the IMF fell by $3 million to $443 million.

This week the rupee crossed the psychologically important level of 50.60 against the dollar and ended the week at 50.02, despite intervention by the central bank.

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