Date:21/08/2005 URL: http://www.thehindubusinessline.com/2005/08/21/stories/2005082102810300.htm

Back Forex reserves rise $1.74 b

Our Bureau

Mumbai , Aug. 20

THE country's foreign exchange kitty expanded by $1.74 billion during the week ended August 12 on account of an increase in foreign currency assets. The reserves have increased by over $6 billion in the past three weeks.

As per the RBI's Weekly Statistical Supplement, the foreign exchange reserves increased by $1.74 billion to touch $144.375 billion, up from $142.637 billion in the previous week.

For the week ended August 2 and July 29, forex reserves had gained by $2.037 billion and $3.062 billion, respectively.

Foreign currency assets for the week ended August 12 increased by $1.858 billion to touch $138.524 billion. Foreign currency assets expressed in dollar terms include the effect of appreciation/depreciation of non-US currencies (such as euro, sterling, yen) held in reserves.

The increase in foreign currency assets is on account of foreign inflows into Indian equity markets. Gold and Special Drawing Rights remained unchanged at $4.395 billion and $4 million, respectively.

The country's reserve tranche position in IMF, however, dropped by $120 million to touch $1.452 billion.

The FII inflow into the equity market during that week was $163.7 million, according to the Securities and Exchange Board of India's Web site.

In the coming week, dealers said the rupee could depreciate if the oil prices continued their upward trend and the dollar gained globally. However, if FII inflows continued then rupee could appreciate.

The rupee was likely to be in the range of 43.50-43.65.