Forex reserves at $1.66 bn

Foreign exchange reserves rose $1.66 bn during the week ended May 29 largely on account of dollar purchases by the central bank to stem the rise of the rupee against the dollar.

Also, there has been some revaluation impact of non-dollar assets in reserves because the dollar is weakening against the rupee in the international markets.

The latest Reserve Bank figures indicate that total foreign exchange reserves including gold and SDR rose $1,667million to touch $262.3bn as on May 29. Reserves rise largely on account of dip in foreign currency assets which rose $1,291million. While reserves with the International Monetary Fund (IMF) rose $27m and the value of gold rose $373million, the value of SDR (special drawing right- the reserve currency with the IMF) remained unchanged during the week.

With foreign portfolio investors, bringing in chunks of dollars into the country, the Reserve Bank has been mopping up these inflows to prevent the rupee from strengthening againt the dollar at a fast pace, according to an economist with a local brokerage firm who did wished to be quoted.