The country?s foreign exchange reserves dropped by $1.5 billion to $278.2 billion in the week ended March 19,said the Reserve Bank of India (RBI) said in its weekly statistical supplement, released on Friday. While foreign-currency assets fell by $1.5 billion to $253.8 billion, gold reserves were unchanged at $17.9 billion, the RBI said.
Special drawing rights with the International Monetary Fund fell by $30 million to $5.03 billion, while its reserves with the IMF went down by $9 million to $1.38 billion.
Total reserves have climbed up by $24.4 billion in the last one year. Essentially, reserves constitute of overseas currencies, gold and special drawing rights with the IMF.
India?s rupee on Friday advanced the most in a month to its strongest level in 1? years on speculation faster economic growth will fuel more overseas investments to the nation?s stocks.
The rupee completed a third weekly gain this month as data from the Securities & Exchange Board of India showed overseas funds have bought Indian equities worth a net $3.4 billion this year, adding to last year?s $17.6 billion, raising holdings to a record $76.2 billion on March 25. The Bombay Stock Exchange?s Sensitive Index had a seventh winning week, taking gains in the past year to 76 percent. ?The rupee is gaining support based on fundamentals, so the advance may persist in the near term,? said Sudarshan Bhatt, chief currency dealer at state-owned Corporation Bank in Mumbai.
Meanwhile, the Indian currency will appreciate to 43.5 by the end of the year, strategists at Morgan Stanley including Hong Kong- based Stewart Newnham wrote in a research note Friday.
Government bonds ended up Friday as some traders bought on the view that the selling seen in the past few days was unwarranted, dealers said. The yield on the 6.35 % note due January 2020 fell three basis points to 7.85 %. The yield may fall to 7.75 percent by March 31. In the derivatives market, 10-year bond futures maturing in March and June were traded at 8.31 %and 8.31 %, respectively, unchanged from yesterday, according to the Web site of the National Stock Exchange of India Ltd.