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Forex reserves up $271 m; hit level seen at FY14 start

The RBI seems to have managed to salvage the fall in the forex reserves as the pile is now back to the level seen at the beginning of 2013-14.

The RBI seems to have managed to salvage the fall in the forex reserves as the pile is now back to the level seen at the beginning of 2013-14.

India’s foreign exchange reserves stood at $293.79 billion as of February 14, up by $271 million year-on-year. Helped by a return of dollar inflows into the debt market since December, RBI has been able to buy dollars intermitently from the market thereby boosting reserves.

In 2013, despite a massive fall of the rupee to its all-time low of 68.85/$ in August, the RBI interventions in the exchange rate market were not aggressive. Economists had attributed this reluctance to intervene to the country’s depleting reserves. Forex reserves had dipped by $19 billion to $274.81 billion in September 2013 in the aftermath of the big outflows seen from the domestic debt market.

Foreign institutional investors have now turned net investors of bonds after December 2013 and have bought bonds worth $3.6 billion so far.

The rupee has been steady in the 61.50-62.50/$ band since January. Even as the currency continues to be stable, IMF has advised RBI must have a contingent plan to safeguard the country’s exchange rate due to the US Federal Reserve cutting back its stimulus.

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First published on: 22-02-2014 at 03:25 IST
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