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Forex reserves dip slightly to $42.824 billion

India's forex reserves dipped marginally to $42.824 billion in the week ended May 25, the Reserve Bank of India said on Saturday.

Reserves had touched an all-time high of $42.829 billion in the previous week ended May 18 bolstered by rising foreign portfolio investments and rising inflows from firms which recently raised capital abroad.

However, foreign investors were net sellers to the tune of $5.5 million in the week ended May 25 as against being net buyers of $87.8 million in the previous week.

Fears that the downgrade of India's sovereign rating outlook by global rating agency Fitch late Thursday would affect foreign portfolio investments, drove Indian shares over two percent lower on Friday.

However some analysts said they did not expect much impact as the reasons for the downgrade -- worries about India's fiscal policy, privatisation and deterioration in foreign investment climate -- are not new.

The rupee shrugged off the Fitch revision and closed at 47.01/02 per dollar on Friday, off a low of 47.10.

India's foreign currency assets which are expressed in US dollar terms, include the effect of appreciation or depreciation of non-US currencies such as the Euro, Sterling and Yen, held in reserves.

Reuters

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