Revaluation of gold reserves and a stronger rupee lifted India’s foreign exchange (forex) reserves by over $1 billion in the week ended November 2, analysts said on Sunday.
“The rise in forex reserves can be attributed to the revaluation impact of gold value and that the RBI might have picked up some deliveries on its foward positions,” Anindya Banerjee, Deputy Vice President for Currency and Interest Rates with Kotak Securities, told IANS.
According to Sajal Gupta, Edelweiss Securities’ Head for Forex and Rates, the RBI might have also bought US dollars on lower levels, when the Indian rupee strengthened.
Consequently, India’s forex reserves increased by $1.05 billion during the week ended November 2, when the rupee strengthened to around 72.44-73 levels against the US dollar.
On Friday, the Reserve Bank of India’s weekly statistical supplement showed that overall forex reserves increased to $393.13 billion from $392.07 billion reported for the week ended October 26.
India’s forex reserves comprise foreign currency assets (FCAs), gold reserves, special drawing rights (SDRs) and India’s position with the International Monetary Fund (IMF).
Segment-wise, FCAs — the largest component of the forex reserves — rose by $487.7 million to $368.13 billion during the week ended November 2.
Besides the US dollar, FCAs consist of 20-30 per cent of other major global currencies.
Similarly, the RBI’s weekly data showed that the value of the country’s gold reserves increased. It went up by $366.5 million to $20.88 billion.
According to the data, the SDR value inched up by $7.4 million to $1.46 billion, while the country’s reserve position with the IMF increased by $192.2 million to $2.63 billion.