Forex kitty reverses 5-wk trend, swells $1.4 b to $249 b

MUMBAI: Forex reserves rose $1.4 billion during the week ended March 13, reversing the trend of the past five weeks, which saw reserves dip by close to $4 billion.

The latest rise was due to revaluation of non-dollar reserves in foreign currency assets and partly due to dollar purchases by the central bank. According RBI figures, total foreign exchange reserves, including gold and SDR (currency with the International Monetary Fund), rose $1.4 billion to touch $249.3 billion.

While foreign currency assets rose $1,432 million, reserves with IMF rose $2 million. The value of gold and SDR in reserves, however, remained unchanged during the week. While reserves are higher than the previous week, they are $57 billion lower compared with the same period last year.

According to foreign currency analysts, much of the rise in foreign currency assets, of late, has been due to revaluation of non-dollar assets in reserves vis-��-vis the dollar, and to an extent due to dollar purchases by RBI.

Major international currencies such as the euro and the pound have strengthened against the dollar in the past few days, which in turn is impacting the valuation of foreign exchange reserves, expressed in dollar.

In other developments, the government has completely vacated ways and means advances (WMA) account. WMA is a temporary advance from the central bank to meet revenue mismatches.

This reflects relatively better financial position by the central bank. State governments too have kept their WMA account vacant.