labels: rbi, finance - general, economy - general, banks & institutions
Forex reserves top $188 billionnews
24 February 2007

Mumbai: The country's foreign exchange reserves rose by nearly $4 billion in a week to a record high $188.912 billion on February 16 from $185.078 billion a week earlier.

Foreign currency reserves had risen by $5 billion in the week to February 9, and have now risen by $11.7 billion since December 29, the Reserve Bank of India (RBI) said.

Analysts attribute the spurt in foreign exchange reserves to probable central bank intervention in the currency market to cap the rupee.

The rupee has risen 6.4 per cent from a three-year trough of 47.04 per dollar last July to 44 per dollar currently.
Forex traders say the central bank has been intervening in the market since November last year, and appears to have stepped up its efforts in February, capping the rupee at a 16-month high of 44.03 on February 9.

The RBI bought $5 billion in intervention in November and December, according to official data. The central bank had also intervened in May, when it bought $504 million. It bought a total of $8.14 billion in the financial year to March 2006. Intervention figures for January and February were not available.

However, the RBI purchases were less compared to $20.85 billion it bought in 2004-05.

The rupee has been gaining on the strength of foreign funds flowing into the booming Indian economy, but has lost some momentum this month due to RBI intervention and end of the year considerations.


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Forex reserves top $188 billion