The foreign exchange (forex) reserves rose by $3.16 billion in the week ended December 26, the biggest weekly rise so far in 2014-15, data from the Reserve Bank of India showed.
Forex reserves stood at $320 billion as of December 19, up by $3.16 billion in that week. Reserves have expanded by $24.49 billion year-on-year. While part of the rise in reserves can be attributed to the movement in exchange rates (the dollar’s recent rise), some of it also reflect likely purchases of dollars by the RBI.
Forex assets rose by $33.3 billion, indicating the RBI may have bought dollars from the foreign exchange market. The RBI has been largely a net buyer of dollars in 2014, both in the spot and forward markets.
The central bank details its forex purchases and sale witha delay of two months. The rupee ended at an over 13-month low of 63.56/$ on Friday.
The currency has weakened 2.5% since January.
In January-October, the RBI bought a total $24.7 billion in the said period to soak up big dollar inflows into the debt market, the central bank’s bulletin shows.
Foreign investors have been pumping in dollars, primarily into the debt market. FIIs have poured in $26.2 billion so far in 2014 into bonds. FIIs also invested around $16 billion into equities. This big inflow of dollars has reflected in the forex reserves as well.