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Forex reserves swell by $149 mn to $45.128 billion

India's foreign exchange reserves rose for the third straight week on October 12 and analysts say that a combination of foreign fund dollar supplies and valuation adjustments in other currencies may have provided the gains.

Data released by the Reserve Bank of India on Saturday showed reserves at $45.128 billion on October 12, an increase of $149 million over a week ago.

"Clearly there have been supplies and these could have been from foreign funds," said Janak Desai, country treasurer at IDBI Bank.

Analysts said that these dollar supplies also helped the rupee claw back from record lows during that week.

The Indian unit, which is partially convertible on the capital account, struck a new closing low of 48.1250/1350 to a dollar on October 8, but recovered with the help of these infusions to end the week with a marginal gain.

Foreign funds, which have been a major influencing factor in Indian stock markets, bought a net $68 million in Indian debt and equities during the week ended October 12.

Their purchases of Indian assets have helped the country's foreign exchange reserves to historic highs this year.

They have pumped in $2.7 billion in the year to date, against $1.56 billion in calendar 2000.

"I suspect some of the rise could have also been on account of valuation gains during that week," Desai said.

India's foreign currency assets, which are expressed in dollar terms, include the effect of appreciation or depreciation of currencies other than the US dollar, such as the euro, sterling and yen, held in reserves.

The RBI does not disclose the exact composition of the foreign currency assets but analysts say the valuation gains of the non-dollar currencies, which are estimated at 15 per cent of the total, were substantial.

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