NEW DELHI: Despite the massive intervention by Reserve Bank of India (RBI) in the forex market wherein it sold huge quantities of dollars to defend the bleeding rupee during the week, the country's forex reserves jumped by $4.368 billion to $693.318 billion. During the week to December 19, the rupee gained almost 2% ending weeks of decline.
The forex kitty stood at $688.949 billion in the previous week.
The rupee changed little, hovering sideways in a holiday-thinned trading closing nearly flat at 89.8325 on Friday as state-run banks intermittently offered dollars, while its Chinese counterpart lapped up dollars, underscoring the divergent fortunes and outlooks for the currencies of the two Asian giants.
Meanwhile, dollar-rupee forward premium extended their slide from the previous session, with the one-year implied yield declining 8 bps to 2.75% and the 1-month forward premium edging lower to 39.50 paisa after surging earlier in the week.
Expectations of further interest rate cuts by the US Federal Reserve, despite divergent outlooks from some of its peers, have weighed on the dollar. Investors are also waiting for US president Donald Trump to nominate a Fed chair to replace Jerome Powell, whose term ends in May.
For the reporting week, foreign currency assets, which are the biggest component of the reserves, increased by $1.641 billion to $ 559.428 billion, the data released by the central bank showed Friday.
Expressed in dollar terms, the foreign currency assets include the effects of appreciation or depreciation of non-dollar units, such as the euro, pound, and the yen, held in the foreign exchange reserves.
Value of the gold reserves increased by $2.623 billion to $110.365 billion during the week, the RBI said.
The special drawing rights (SDRs) also rose by $8 million to $18.744 billion and the country’s reserve position with the IMF also rose by $ 95 million to $ 4.782 billion in the week, according to the RBI data.