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Forex reserves at a record high of $57.8 billion

The continued rise in foreign currency assets pushed up the foreign exchange reserves to a new record high of $57.066 billion during the week ended June 21, 2002.

According to the Reserve Bank of India's weekly bulletin, the entire increase of $542 million in forex reserves was contributed by the foreign currency assets which had shot up to $53.808 billion during the week, from $53.266 billion a week ago.

Gold reserve and special drawing rights (SDRs), however, remained unchanged at $3.249 billion and $9 million, respectively.

The ever-increasing forex reserve was partially because of RBI's indirect intervention in the forex market, absorbing the excess dollar supply through state-run banks.

This was done with the twin aim of building huge dollar positions for future debt services and at the same time to check the rupee's appreciation for better export competitiveness, a senior forex dealer at a public sector bank said.

The sharp rise of other non-US currencies such as the Euro, Sterling and Yen against the greenback on the back of the meltdown in US stocks markets during the week, also factored the uptrend in forex reserves, he added.

During the same week, the yen rose to a seven-month high to 120.83, while the euro shot up to 26-month high at 97.22 against the greenback.

Foreign currency assets expressed in USD terms, include the effect of appreciation/depreciation of the non-us currencies such as euro, sterling and yen held in reserves.

The rupee appreciated by 9 paise against the dollar to 48.91 during the same week from 49.00 of the previous weekend on heavy export dollar inflows and thin demand.

UNI

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