The Hindu Business Line : Forex reserves fall $135 m

THE country's foreign exchange reserves fell a modest $135 million to touch $138.526 billion for the week ended June 10, according to the Reserve Bank of India's Weekly Statistical Supplement.

In the previous week, the reserves had fallen by over $1 billion on account of international currency revaluation, to touch $138.661 billion.

Currency revaluation, especially a fall in the value of the euro, was the main reason for the decrease in the forex reserves, said a chief dealer with a private bank.

In the week under review, the euro fell from the levels of $1.25 to $1.21, he said.

Added to this was the fact that there was no major inflow. Foreign institutional inflow for the week was $240.30 million, according to figures from SEBI.

According to the WSS, foreign currency assets fell $163 million, in the week under review, to touch $132.567 billion.

Foreign currency assets expressed in dollar terms include the effect of appreciation/depreciation of non-US currencies (such as euro, sterling, yen) held in reserves.

Gold and special drawing rights remained unchanged at $4.376 billion and $4 million, respectively. The country's reserve position in the IMF increased $28 million to touch $1.579 billion.

On the possible movement of the rupee in the coming week, the dealer said it is likely to be range-bound between 43.65 and 43.45.

"There is no clear direction for the rupee currently. One day it tracks the euro, while the next day it tracks the yen. It is likely to be range-bound for some time," he said.

With the monsoon likely to be normal and inflation ruling moderate as seen from figures released on Friday, oil price, still hovering around $55 for a barrel, is the only cause for worry, the dealer said.

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