MUMBAI: Foreign exchange reserves rose $1.5 billion during the week ended October 09, largely on account of revaluation of non-dollar assets in reserves vis-a-vis the dollar.
The latest figures released by the Reserve Bank of India on Friday indicate that the total foreign exchange reserves, including gold and special drawing rights (SDR—reserves currency with the International Monetary Fund), rose $1,521 million to touch $281.86 billion during the week ended October 09.
Almost the entire rise in reserves was on account of a rise in foreign currency assets, which rose $1,477 million. The value of SDR and the reserves with the IMF rose $35 million and $9 million respectively during the week.
“The dollar had weakened sharply against major global currencies in the last two weeks. This could have resulted in revaluation of non-dollar assets in reserves,” said a senior treasury official with a private bank.
Almost 40% of the reserves is believed to be comprised in non-dollar assets including the sterling pound, yen, euro and the yuan, though no central bank makes their currency composition of reserves public.
In the other developments, both the central and the state governments have kept their ways and means advances (WMA) account with the RBI vacant during the week ended October 09. WMA is a facility under which the government (state as well as the centre) can borrow from the central bank to meets its daily revenue mismatches.
While borrowings within the limit is at the prevailing repo rate, borrowings above the agreed limit (between the government and RBI) is at 2% higher than the repo rate.
Source : The Economic Times