In­dia’s Forex Re­serves Reach Record High of $360 bil­lion

The Economic Times - - Markets: Beating Volatility - Our Bu­reau

In­dia’s for­eign ex­change re­serves jumped $4.2 bil­lion to touch a record high of $360 bil­lion for the week ended April 1, 2016, said the Re­serve Bank of In­dia in its weekly sta­tis­ti­cal re­port. “The Re­serve Bank of In­dia has been buy­ing dol­lars tak­ing ad­van­tage of the fact that the ru­pee has ap­pre­ci­ated al­most 3%, giv­ing an op­por­tu­nity for the cen­tral bank to buy cheaper dol­lars in the cur­rency mar­ket,” said Ab­hishek Goenka, founder of for­eign risk so­lu­tions firm IFA Global.

The In­dian ru­pee has been ap­pre­ci­at­ing on the back of im­proved dol­lar in­flows into the coun­try into both the equity and debt mar­kets. Over the month of March, .₹ 21,143 crore came into the equity mar­kets. In the first week of April, .₹ 7,625 crore was pumped into the debt and equity mar­kets by for­eign in­sti­tu­tional in­vestors.

High dol­lar re­serves im­prove im­port pay­ment ca­pa­bil­i­ties of the coun­try, al­low the Re­serve Bank of In­dia to in­ter­vene in cases of cur­rency run­down and also fa­cil­i­tate a bet­ter global rat­ing.

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