Date:15/04/2006 URL: http://www.thehindubusinessline.com/2006/04/15/stories/2006041504090100.htm

Back Forex reserves spurt $2.5 b for third week

Our Bureau

Mumbai , April 14

For a third week in a row, India's foreign exchange reserves have risen by over $2.5 billion.

For the week ended April 7, the net accretion to the forex reserves was $2.587 billion to touch a record high $154.209 billion.

In the previous week, the reserves had risen by $2.96 billion to $151.62 billion. In the last three weeks, the net accretion to the reserves stood at $8.047 billion.

This is the eleventh consecutive week that the reserves have been increasing.

According to dealers, the central bank has been buying dollars and releasing rupees into the system to improve liquidity.

According to the RBI's weekly statistical supplement, foreign currency assets increased by $2.584 billion to touch $147.692 billion during the week.

Foreign currency assets, expressed in dollar terms, include the effect of appreciation or depreciation of non-US currencies such as euro, sterling and yen. During the week, net FII inflows stood at $112.20 million.

"RBI continued buying dollars. Besides, FII inflows also continued pushing the reserves up," said a forex dealer.

Gold reserves were unchanged at $5.75 billion.

The reserve position in the IMF also rose $3 million to touch $759 million.

However, SDRs remained unchanged at $3 million.

Dealers expected the rupee to strengthen during the next week.