MUMBAI: India’s foreign exchange reserves gained $4 billion to reach $379.3 billion for the week ended May 19 said the Reserve Bank of India on Friday, reaching another record high.
The previous recorded high was $375.7 billion as reported on the end of the first week of May.
At a time when the Indian equities market has been on a steady upward trajectory supported by strong inflow of foreign funds and positive global cues the Reserve Bank of India has been mopping up foreign currency.
“All the gains in the forex reserves might not be due to buying of foreign currency assets, a chunk of it could also be from the maturities of the forward contracts that the regulator could have gotten into a few months back,” said Ashutosh Khajuria, executive director, Federal Bank.
Bankers also pointed out that with strengthening of the Sterling, Yen and Euro against the dollar in the past few weeks, there has also been a revaluation of the foreign currency assets the RBI holds helping in the appreciation.
Market sources also pointed out that the RBI could also be intervening in the market by buying dollars as the Rupee has remained very strong.
The stock exchanges has also been on a rally mode, with Rs 24,776 crore being pumped into the Indian equities and debt market in the month of May. The total foreign investment into Indian markets has reached Rs 1.16 lakh crore for the year 2017.
Source: economictimes.indiatimes.com