India's forex reserves surge $5.04 bn in the week ended 28 March

05 April 2014

india's Foreign exchange reserves swelled by $5.04 billion during the week ended 28 March 2014, helped by surging investment flows into the country and a consequent firming up of the rupee.

The Reserve Bank of India (RBI) has reportedly been buying dollars regularly in an effort to build up its foreign currency assets.

The country's forex reserves stood at $303.67 billion as of 28 March against $298.64 billion in the previous week, RBI data released on Friday showed.

This is also the highest weekly increase in the country's foreign currency reserves since the week ended 29 November 2013.

The RBI, which had spent much of its forex reserves defending the rupee that hit a record low of 69 a dollar in late August 2013, has now been shoring up its reserves after the Indian currency emerged from its worst losses amidst global market volatility and record current account deficit last year.

RBI's defence of the rupee last year saw its foreign exchange reserves hitting a more than three-year low in September 2013.

The rupee is now trading at eight-month highs after the RBI took measures to raise loans abroad and provide dollars directly to oil companies and the government announced curbs on gold imports.

India sharply reduced its current account deficit, thanks to a slowing of imports and curbs on gold imports.

The rupee rose 1.6 per cent in the week ended 28 March, breaching the 60-mark for the first time in eight months on the back of robust foreign fund inflows.

Foreign investors have invested a net $10.3 billion in the country's equity and debt markets so far this year on expectations of stable government after a general election and signs of economic recovery.

 search domain-b