RBI Refrained From Buying Dollar in February; Sold 530 Million Dollars - The New Indian Express

RBI Refrained From Buying Dollar in February; Sold 530 Million Dollars

Published: 12th April 2014 06:00 AM

Last Updated: 12th April 2014 01:46 AM

The Reserve Bank of India, which usually purchases dollars from the market every month to build foreign reserves, bucked the trend in February. Not only the central bank refrained from buying, which is a first in the 11 months of 2013-14, it also sold $530 million in February.

Data for the last month (March) of the FY14 is awaited.

In FY14, the forex reserves crossed $300 billion mark, which was highest since December, 2011.

For the week to March 28, 2014, the reserves rose by whopping $5.038 billion to $303.673 billion.

In January, RBI was a net seller of $1,929 million when it purchased $375 million and sold $2,304 million. Similarly, from May until September, RBI was net seller of the US currency on a monthly basis to help the rupee, which plunged after former US FED chairman Ben Bernanke had on May, 24 last hinted at withdrawing its easy money policy.

Between October and December, 2013, the central bank net purchased $17.498 billion from the market.

The rupee depreciated nearly 30 per cent between May and August. It touched a life-time low of 68.85 during intra-day trades on August 28, 2013.

According to DBS Bank, the central bank was likely to remain focused on building foreign reserves in the months ahead, with the present phase of spare capacity and weak demand conditions lowering the inflationary threats.

For the week ended April 4, foreign currency assets (FCAs), a major part of the overall reserves, rose $ 2.399 billion to $278.805 billion, the Reserve Bank said.

FCAs, expressed in dollar terms, include the effect of appreciation/depreciation of the non-US currencies such as the euro, pound and yen held in its reserves.

Gold reserves rose by $588.8 million to $21.566 billion.

(With agency input)

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