Forex reserves fall by $1.12 m

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Mumbai: The forex reserves have fallen by $1.12 million to $284.39 billion in the week ended on October 30. The rupee rose for a third day, the longest stretch of gains in a month, as signs of the global economy is recovering from a recession buoyed demand for the nation’s assets.

India’s 10-year bonds fell for a third day, the longest losing streak in almost four weeks, as some investors sold their holdings to buy securities at an auction

on Friday. The yield on the 6.90 % note due July 2019 climbed two basis points, or 0.02 %, to 7.31%.

The yield on the benchmark note maturing in 2019 rose to the highest in more than a week as the government sold $1.92 billion of debt. The government plans to raise a record Rs 4.51 trillion from bond sales in the fiscal year ending March 31. “The pressure of supply is making it difficult for investors to hold bonds and prevent yields from rising,” said Sanjay Arya, a treasurer at state-owned Bank of Maharashtra in Mumbai.

The government sold Rs 30 billion of the 7.32 % notes maturing in 2014, Rs 40 billion of the 6.35 % notes due in 2020 and Rs 20 billion of the 7.50 % notes due 2034, according to the RBI. The currency advanced to a two-week high after Australia’s central bank on Friday raised its growth forecast for 2009 and the US labour department reported fewer claims for unemployment benefits than estimated by economists. Overseas funds bought $14.2 billion more of Indian shares than they sold this year through November 4, helping drive the BSE’s Sensitive Index, 65% higher.