Forex reserves jump $1.2 bn to 6-month high.

MUMBAI: Foreign exchange reserves rose by $1.25 billion to their highest since January, during the week ended July 30, largely due to revaluation of non-dollar assets in reserves, according to the Reserve Bank of India (RBI).

The country’s forex reserves rose by $1,245 million in the week ended July 30. The reserves are at $284.18 billion. Foreign currency assets, comprising dollars, British pounds and euros, among others, rose $1.837 billion during the week.

While special drawing rights, or SDRs — the reserve currency with the IMF — and the reserve capital with the IMF rose $19 million and $5 million, respectively. However, the value of gold in reserves dipped by $616 million.

US Dollar index was down from 82.464 to 81.539 through the last week, even though US new home sales data was better than expected, according to a note by SBI Research to its clients.

A dip in the index implies the weakening of the US dollar. In other developments, the government maintained only the minimum `100 crore in its account with the Reserve Bank of India (RBI), down `15,066 crore over the previous week’s levels. This indicates that the government has started spending the revenues generated by selling various telecom licences, said a senior bond market official, and this could ease liquidity conditions in the market, to an extent.

On the other hand, both the Centre as well as state governments did not resort to any short-term borrowings from the central bank. Such borrowings are resorted to by governments to meet their daily revenue mismatches. These short-term borrowings are known as ways and means advances (WMA), a facility under which governments borrow from the central bank to meet their daily revenue mismatches.

Source : economictimes.indiatimes.com