MUMBAI: For the first time in eight weeks, India's forex reserves have increased by a modest $1.51 billion, reaching $658.091 billion for the week ending November 29, after a loss of over $50 billion in the previous seven weeks. This increase was mainly due to efforts to defend the rupee, which hit record lows of 84.76 this week, and partly due to revaluation losses.
The week under review saw the rupee logging record falls, including crossing the 84.5 mark. However, after the central bank left the policy rates unchanged and cut the cash reserve ratio coupled with a softer dollar the rupee closed on Friday at 84.6875 against the dollar, up from its close at 84.7325 in the previous session.
The currency logged fifth consecutive weekly fall, declining 0.2 percent. According to the weekly statistical supplement issued by the Reserve Bank Friday, the forex kitty made the first recovery in eight weeks adding $1.51 billion to $658.091 billion for the week to November 29.
Overall reserves had dropped by $1.31 billion to $656.582 billion in the previous reporting week. The reserves have dropped by a record $17.761 billion in the first week of November. The forex reserves had touched an all-time high of $704.885 billion in the week to September 27.
For the week ended November 29, foreign currency assets, a major component of the reserves, increased by $2.061 billion to $568.852 billion, the Finance Ministry data showed on Friday.
Expressed in dollar terms, the foreign currency assets include the effect of appreciation or depreciation of non-US units like the euro, pound and yen held in the foreign exchange reserves.
Gold reserves decreased by $595 billion to $66.979 billion during the week, the special drawing rights were up by $22 million to $18.007 billion, and the reserve position with the IMF was also up by $22 million to $4.254 billion in the reporting week, the central bank data showed.
The rupee also got a help from the Reserve Bank which raised the interest rate ceiling that banks can offer for foreign currency non-resident (FCNR-B) deposits to boost forex inflows at a time when the rupee has been under consistent pressure.
The rupee had declined to its all-time low of 84.7575 earlier in the week, hurt by weakness in the Chinese yuan and strong dollar bids in the non-deliverable forwards market, prompting intervention by the RBI.
