Rediff.com« Back to articlePrint this article

India's forex reserves dip to $302 billion

Last updated on: December 26, 2011 14:23 IST

India's foreign exchange reserves nearly hit a nine-month low and fell by $5 billion to $302 billion for the week ended December 16, on account of revaluation in foreign currency assets.

According to the Reserve Bank of India, foreign currency assets fell by $4.7 billion to $267 billion.

While gold reserves remained intact at $28 billion, there was a dip in special drawing rights (SDR). SDRs fell by $54 million to $4.4 billion.

However, the reserve position in the International Monetary Fund (IMF) rose by $47 million to $2.6 billion during the reporting period.

The foreign exchange reserves stood at $301.8 as on March 11.

Depreciation in the rupee by 19

per cent in the last four months has led to a slew of measures being announced by the RBI in order to enhance dollar liquidity.

Steps taken by the regulator include deregulation of interest rates on non-resident (external) accounts (NRE)  and non-resident ordinary rupee accounts (NRO); increase of cap on spreads of external commercial borrowings (ECB), and putting a curb on cancellation and rebooking of forward contracts in the over the counter market (OTC) by banks.

The central bank has also sold $1.8 billion in this financial year, according to the latest data released by the RBI.

The intervention was done during September and October, in order to curtail volatility in the rupee.

BS Reporter in Mumbai
Source: source image