The Hindu Business Line : Forex reserves rise $3.7 billion

Mumbai, Sept 28 The forex reserves surged by $ 3.704 billion to touch $ 235.891 billion for the week ended September 21, due to currency revaluation and the central bank’s buying of dollars to stem the appreciation in rupee.

In the earlier week, the forex reserves had increased by $1.810 billion to touch $232.187 billion.

This is the third week in a row that forex reserves have shown an accretion.

Primary reason

The treasury head at a private bank said that the primary reason for the accretion was RBI’s intervention in the market.

“The RBI bought a substantial amount of dollars after the US Fed cut its interest rate, to rein in the rupee’s appreciation. Currency revaluation could have also been a factor as the euro, pound and the yen appreciated by 1-2 per cent against the dollar,” said the treasury head.

The euro had touched a peak of $ 1.4120 against the US dollar, in the week under review.

As per the Weekly Statistical Supplement of the RBI, the foreign currency assets rose by $ 3.702 billion to touch $ 228.572 billion.

Foreign currency assets, as expressed in dollars, include the effect of appreciation or depreciation in non-US currencies (euro, sterling and yen) held in reserves.

The gold and SDRs were unchanged at $ 6.881 billion and $ 2 million respectively.

The country’s reserve position in IMF went up by $ 2 million to touch $ 436 million for the same period.

The gross bank credit for the fortnight ended September 14 went up by Rs 23,748 crore to Rs 19,83,821 crore. Of this, food credit declined by Rs 320 crore to Rs 38,170 crore. Non-food credit increased by Rs 24,068 crore to touch Rs 19,45,650 crore.