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Forex reserves cross $80 B mark
Monday, 02 June 2003, 19:30 IST
NEW DELHI: India's foreign exchange reserves crossed a record $80 billion mark with inflow of $1.59 billion over the week ending May 23, the Reserve Bank of India (RBI) said Saturday.
After depreciation over the past few weeks, the dollar stabilised in that week. In the domestic market, the RBI had to intervene to stabilise the rupee.
In addition to inflow of remittances, the appreciation of non-U.S. currency assets such as the euro, pound sterling and yen held in reserves also helped boost India's forex reserves to $80.82 billion in the week ending May 23, RBI data shows.
While the foreign currency assets increased from $75.83 billion in the previous week to $77.43 billion on May 23, the reserves of gold coins and bullion remained unchanged at $3.39 billion. Similarly, there was no change in the special drawing rights (SDR) reserves.
During the course of one week, India's reserves jumped from $79.23 billion to $80.82 billion.
"The foreign exchange reserves do not include India's reserve tranche position (RTP) with the International Monetary Fund (IMF). The RTP may change from time to time due to India's transactions under the financial transaction plan with the IMF as well as changes in SDR exchange rates vis-à-vis rupee and the dollar," the central bank noted.
SDR are international reserve assets created by the IMF to supplement members' existing reserve assets.
The IMF has in a report noted that India's management of foreign exchange reserves is comparable to the best global practices in this area.
The document titled "Guidelines for Foreign Exchange Reserve Management" observes that India is "maintaining a capacity to intervene in the markets to support the exchange rate regime or to contain excessive volatility in the foreign exchange market", as also "to provide confidence to the markets and reduce their vulnerability to financial crises".
The report notes: "India intervenes in the market to even out lumpy demand or supply in thin markets and to prevent destabilising speculation while facilitating foreign exchange transactions at market rates for all permissible purposes. Liquidity is, therefore, an important consideration in reserve management".
Source: IANS
Source: IANS