| Date: |
31-10-2015 |
| Subject: |
India's forex reserves fell $1.9 billion in the week to October 23 |
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KOLKATA: India's foreign exchange reserves fell $1.980 billion to $ 351.547 billion in the week to October 23, Reserve Bank of India said. The central bank does not provide any reason for the movement in reserves but dealers said the RBI has been intervening regularly in the market to stem volatility.
A recent Bank of America Merrill Lynch research report expects RBI's forex market intervention to top $27 billion in FY16 assuming portfolio inflows of $10 billion. The report estimated that RBI needs to inject close to $35 billion in FY16 to fund 5.5% growth.
Forex reserves provides a cushion for country's import bills and dollar-denominated debt servicing requirements. There is a palpable improvement in the investors' con-fidence towards the economy even as fiscal deficits remained above that of regional peers, forcing the govern-ment borrow aggressively.
India's reserves now covers nine months of imports bill. Foreign currency assets, which contributes close to 90% of the reserves, fell $1.933 billion to $328.038 billion.
Source : economictimes.indiatimes.com
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