India’s forex reserves jumped $2.561 billion to $644.151 billion for the week ended May 10, the Reserve Bank of India (RBI) said on Friday. In the previous reporting week, the kitty had increased $3.668 billion to $641.59 billion after three consecutive weeks of decline.
For the week ended April 5, the reserves had hit an all-time high of $648.562 billion following multiple weeks of rise. For the week ended May 10, the foreign currency assets, a major component of the reserves, increased by $1.488 billion to $565.648 billion, the data released on Friday showed.
Expressed in dollar terms, the foreign currency assets include the effect of appreciation or depreciation of non-US units like the euro, pound and yen held in the foreign exchange reserves.
Gold reserves increased $1.072 billion to $55.952 billion during the week. The special drawing rights (SDRs) were up $5 million to $18.056 billion, the RBI said. India’s reserve position with the IMF was down USD 4 million to USD 4.495 billion in the reporting week, the apex bank data showed.
Rupee: This Week, Next Week
The Indian rupee was boxed in a range of 83.44 to 83.52 during the entire week except for today when the RBI sold dollars at 83.50, and later due to long cutting, inflows to the tune of $ 500 billion for a stake sale in an NBFC and front running for the coming MSCI rebalancing to the tune of $ 2 billion took rupee up to almost 83.30 while it closed at 83.3350, said Anil Kumar Bhansali, head (treasury) and executive director of Finrex Treasury Advisors LLP.
This was an opportune time for importers to buy dollars as it has remained on 83.50 for the last 2 weeks and all near term exposures were to be hedged by them at 83.35, he added.
“The rupee is expected to be in a range of 83 to 83.50 next week which is holiday shortened week with holidays on 20 th and 23rd of April due to elections and Budhh Purnima. InFlows should dominate in the 3 trading sessions next week which does not have any important data coming up,” Bhansali added.
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