The Hindu Business Line : Forex kitty rises $5.36 b

Mumbai, Oct. 19 The forex kitty swelled by $5.356 billion to $256.686 billion for the week ended October 12, backed by sustained intervention by the Reserve Bank of India in the forex market.

The reserves had gone up by $3.568 billion for the week ended October 5, said RBI’s Weekly Statistical Supplement.

“The RBI has been constantly intervening in the forex market, buying dollars in order to cap the appreciation of rupee,” said Mr L.V. Prasad, Head-Forex and Commodities, IndusInd Bank.

Foreign exchange dealers said there could be some slowdown in accretion to reserves next week, with the probable slowdown in FII inflows. They, however, said that it would be offset by the revaluation of currency assets. “There will be some revaluation gains next week contributing to accretion to the reserves,” said Mr V. Rajagopal, Head-Treasury, Kotak Bank.

Volatility likely

Dealers added the rupee could also witness some volatility next week. “The rupee will be volatile next week, showing some strength on days of good inflows and weakening on others,” said the treasury head of a foreign bank.

The foreign currency assets went up by $5.356 billion to $248.880 billion. Foreign currency assets, as expressed in dollars, include the effect of appreciation or depreciation in non-US currencies (euro, sterling and yen) held in reserves.

The country’s reserve position in gold, SDRs and IMF remained unchanged at $7.367 billion, $2 million and $437 million, respectively.