Thursday 25th, July 2024
canara news

Strengthening dollar dents India's Forex reserves

Published On : 28 Nov 2015

Mumbai, Nov 28 (IANS) Strengthening dollar coupled with attempts by the Indian central bank to curb volatility in rupee value depleted India's foreign exchange (Forex) kitty by $149.7 million, experts said on Saturday.

Overall, the Forex reserves stood at $352.36 billion for the week ended November 20. India's Forex kitty had gained by $780.9 million to $352.51 billion during the previous week ended November 13.

"The slight fall in the Forex reserves can be attributed to the dollar selling by Reserve Bank of India (RBI) to stabilise the rupee value," Anindya Banerjee, associate vice president for currency derivatives with Kotak Securities, told IANS.

"The rupee value has come under pressure due to the heavy flight of foreign funds from India due to the upcoming US rate hike expected in December."

Foreign funds have been on a selling spree in the Indian debt and equity markets ahead of the US Fed's imminent rate hike decision slated for December.

On a weekly basis, the rupee had weakened by nine paise to 66.19 to a US dollar (November 20) from its previous close of 66.10 to a greenback (November 13).

The data with the National Securities Depository Limited (NSDL), showed that the FPIs (Foreign Portfolio Investors) sold Rs.5,459.41 crore or $825.49 million in equity and debt markets from November 16-20.

The data with stock exchanges showed that the FPIs sold stocks worth Rs.2,749.44 crore in the period under review ended November 20.

The FPIs have taken out Rs.23,352 crore during the period August-September. Till date in November, the foreign investors have off-loaded stocks worth Rs.5,809 crore.

The Indian central bank intervenes in the open markets, if the rupee value comes under heavy attack, by either buying or selling the greenback.

In addition, the RBI's weekly statistical supplement revealed that the foreign currency assets (FCAs) receded by $133.5 million to $328.39 billion in the week under review.

"The FCA depletion happened on the account of dollar strengthening against the major global currencies like pound sterling, euro and yen which are held in reserve. The dollar appreciated by an approximate 1 percent against the global currencies," the RBI was quoted as saying in its statistical supplement.

The FCA constitutes the largest component of India's Forex reserves. It consists of US dollars, major non-dollar currencies, securities and bonds.

The US dollar is strengthening against emerging market currencies, gold and other assest classes ahead of the US rate hike.

Furthermore, the country's gold reserves remained stagnant during the week under review at $18.69 billion. The gold reserves had risen by $540 million during the week ended November 6.

However, the special drawing rights (SDRs) were lower by $12.2 million at $3.98 billion.

The country's reserve position with the International Monetary Fund (IMF) weakened by $4 million to $1.29 billion.

More News

Sensex, Nifty fall 1% as crude oil prices surge
Sensex, Nifty fall 1% as crude oil prices surge
Aamir Khan calls 'Thugs of Hindostan' role one of his toughest
Aamir Khan calls 'Thugs of Hindostan' role one of his toughest
Fuel prices continue to fall as global crude rates ease
Fuel prices continue to fall as global crude rates ease

Write your Comments

Disclaimer: Please write your correct name and email address. Kindly do not post any personal, abusive, defamatory, infringing, obscene, indecent, discriminatory or unlawful or similar comments. will not be responsible for any defamatory message posted under this article.

Please note that under 66A of the IT Act, sending offensive or menacing messages through electronic communication service and sending false messages to cheat, mislead or deceive people or to cause annoyance to them is punishable. It is obligatory on CANARANEWS to provide the IP address and other details of senders of such comments, to the authority concerned upon request.

Hence, sending offensive comments using canaranews will be purely at your own risk, and in no way will be held responsible.