The Hindu Business Line : Forex reserves rise $328 million

THE country's forex reserves moved up by $328 million to $121.106 billion for the week ended July 16, 2004 from $120.778 billion in the previous week ended.

Forex analysts attribute the increase in reserves to revaluation of currencies and interest accruals. The accretion to the reserves is lower as compared to $700 million for the week ended July 9 and $671 million the week before.

The foreign currency assets jumped by $332 million to $115.737 billion. The reserve position in the IMF has declined by $4 million to touch $1.310 billion.

Experts concur, the accrual was primarily on back of strengthening of the greenback against the rupee with some foreign currency trade inflows.

During the week, the domestic currency weakened to 46.20 against the dollar but recovered towards the end of the week to close at 45.95.

Net FII investments were to the tune of $29.00 million as per the SEBI data. "The reserve accretion can be primarily on account of revaluation of the currencies in the basket of the RBI and some trade inflows. The US currency had gained against the rupee in the week with some interest accruals also taking place," said a senior dealer with a public sector bank.

Liquidity position continues to be comfortable, albeit with a downward move. Funds to the tune of Rs 53,630 crore are parked with the RBI in repos for the week ended July 16. The amount has shown a decline from the previous week in which it stood at Rs 64,000 crore.

For the previous week, rupee had closed at its lowest in a year at 46.32/34 against the dollar.