Forex reserves rose $9.1 billion to a near two-year high of $616 billion in the week ended December 15, latest data from the Reserve Bank of India (RBI) showed. The quantum of increase in the week ended December 15 is the highest since July 14.
“Ä large part of the rise in reserves can be explained by the RBI buying dollars. The greenback had also dropped sharply last week. Around 60% can be attributed to RBI buying dollars and 40% to valuation impact,” says Anindya Banerjee, head of research for Forex & Interest Rates, Kotak Securities.
Foreign currency assets rose $8.3 billion to $545 billion in the week ended December 15. Gold reserves rose $446 million to $47.6 billion.
Special drawing rights rose $135 million to $18.3 billion in the week ended December 15. Reserve position at the International Monetary Fund rose $181 million to $5 billion.
The Rupee gained 0.15% to 83.15 on December 22, and appreciated by 0.46% to 83 in the week ended December 15.
“The weak trend in dollar index has been a major support for the rupee as the American greenback has fallen from $104 to $101.70 in a matter of 10 sessions. However, the overall trend for the rupee remains sideways within the range of 82.90-83.40 zones,” says Jateen Trivedi, VP research analyst, LKP Securities.
Core durable goods, core PCE index and new home sales data will be key triggers for the movement in the rupee.