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Our Bureau

Mumbai, Dec. 12 The country’s foreign exchange reserves fell by $1.83 billion to $245.86 billion for the week ended December 5, due to revaluation of global currencies and also due to selling of dollars by the Reserve Bank of India.

In the previous week ended November 28, foreign exchange reserves had increased by $1.88 billion to $247.68 billion.

As per the RBI’s Weekly Statistical Supplement, the foreign currency assets declined by $1.82 billion to $237.15 billion, for the week under consideration.

Gold and SDRs remained unchanged at $7.86 billion and $3 million.

The country’s reserve position in the IMF fell by $9 million to $845 million.

In the week under review, the euro weakened against the dollar and yen. The yen appreciated as risk averse investors turned away from currencies such as the dollar and euro in favour of the yen.

According to a forex dealer with private bank, it is difficult to predict the rupee’s movement next week. “It should strengthen tracking the euro. But as equity markets worldwide are likely to remain weak, the rupee could remain weak. It may trade in the range of 48.50-48.90.”

As per the RBI Monthly Bulletin for December 2008, the central bank sold a total of $18.67 billion in the spot market. The central bank had been selling dollars regularly to support the weakening rupee.

As against this, in September RBI had sold only $3.78 billion, while it had purchased $1.21 billion in August.

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