The foreign exchange reserve of India continues to decline in the month of October. It fell by $1.83 billion for the week ended December 5 and currently stands at $245.86 billion. The dip is caused following measures taken by Reserve Bank of India to stop further depreciation of rupee. Revaluation in foreign currencies and large scale pullout by foreign institutional investors also contributed in the fall of foreign reserve.
The apex bank sold $18.66 billion in October to stop further depreciation of rupee against dollar. It is the highest foreign currency sale by reserve bank in the financial year 2008-09. The bank brought dollars worth $1.96 billion and sold $28.31 billion dollars by the end of October as per the recent monthly bulletin of RBI. FIIs sold $321.20 million dollars in the equity market.
RBI's Weekly Statistical Supplement maintained that gold and SDRs remained unchanged at $7.86 billion and $3 million in the reporting month. The foreign currency assets declined $1.82 billion and country's assets with International Monetary Fund (IMF) dipped $9 million.
Commenting on the present position of foreign reserve, a forex dealer with private bank said, "It should strengthen tracking the euro. But as equity markets worldwide are likely to remain weak, the rupee could remain weak. It may trade in the range of 48.50-48.90."
Source : TopNews.in