Our Bureau

Mumbai, Dec. 9

THE country's foreign exchange reserves saw an increase of $921 million for the week ended December 2, due to currency revaluation and dollar inflows into the equity markets.

According to Reserve Bank of India's Weekly Statistical Supplement, foreign exchange reserves increased by $921 million to touch $143.098 billion, up from $142.177 billion in the earlier week. The earlier week saw a slight depletion in foreign exchange reserves to the tune of $3 million.

The increase in foreign currency assets by $936 million to $136.935 billion was the main contributor to the rise in reserves.

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 of treasury of a private bank, currency revaluation is probably a crucial reason for the rise in reserves, as the euro saw a movement of about 300 points in the last 15-20 days.

Also, as RBI was not seen in the market, the flows from the market could not have affected the reserves, he added.

Dollar inflows into the Indian markets may have also pushed the reserves up, dealers said.

The net foreign institutional investor inflows into the domestic equity market for the week under review were $360.2 million, according to figures from SEBI.

For the week under review, gold increased by $61 million to touch $4.925 billion.

SDRs (Special Drawing Rights) were unchanged at $4 million.

The country's reserve position in IMF fell by $76 million to $1.234 billion.

For the week under consideration, the euro traded in the range of $1.707 to $1.1813.

The rupee is likely to track the euro and may trade in the range of 46.05 to 46.25 in the coming week, dealers said.

(This article was published in the Business Line print edition dated December 10, 2005)
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