The Hindu Business Line : Forex reserves rise by $1.71 b

The forex reserves have surged by $1.71 billion due to dollar buying by the Reserve Bank of India as well as the revaluation of other major currencies against the greenback.

According to the RBI's Weekly Statistical Supplement, the reserves rose to $162.413 billion in the week ended May 5, up from $160.67 billion in the previous week. In the earlier week, reserves had gained by $3.41 billion. This is the 15th consecutive week that the country's reserves have gained.

As per the RBI's figures, foreign currency assets increased by $1.731 billion to touch $155.329 billion during the week. Foreign currency assets, expressed in dollar terms, include the effect of appreciation or depreciation of non-US currencies such as euro, sterling and yen.

According to the chief currency trader at a private bank, the fact that the rupee had not gained against the dollar despite the appreciation of other major currencies such as the euro and the yen meant that the central bank had intervened.

The strengthening of the euro, the British pound and the yen against the dollar could have also partially contributed to the rise in the reserves, said the dealer.

The euro gained from $1.2585 on May 1 to $1.2720 on May 5.The FII inflows into the equity market were also substantial at $588.4 million during the week under question.

Gold reserves unchanged

Gold reserves and SDRs remained unchanged at $6.3 billion, $6 million respectively. The reserve position in the IMF rose by $15 million to touch $777 million.

Dealers said the rupee could trade in the range of 44.95-45.15 in the next week. "Oil-related demand could keep the rupee weak," said a dealer.