RBI's efforts to stabilise rupee hit country's forex reserves: Experts
Mumbai, Aug 17 : A strong US dollar and subsequent interventions by the country's central bank to stabilise the rupee drained over $1.80 billion from India's foreign exchange (forex) reserves, analysts said on Friday.
As per the Reserve Bank of India (RBI) weekly statistical supplement, the overall forex reserves plunged by $1.82 billion during the week ended August 10 to $400.88 billion from $402.70 billion reported for the week ended August 3.
According to Anindya Banerjee, Deputy Vice President for Currency and Interest Rates with Kotak Securities, the decline in Forex reserves can be attributed to the RBI's intervention to stem the decline in rupee's fall.
The RBI is known to enter the markets via intermediaries to either sell or buy US dollars to keep the rupee in a stable orbit
India's forex reserves comprise of foreign currency assets (FCAs), gold reserves, special drawing rights (SDRs) and the RBI's position with the International Monetary Fund (IMF).
In recent days, factors such as geo-political developments, wider trade deficit, along with outflow of foreign funds have pulled the Indian rupee to fresh record intra-day and closing lows.
On Thursday, the Indian rupee had plunged to an intra-day low level of 70.39-40 -- its lowest ever mark -- against the greenback prompting automobile manufacturers and other import dependent sectors to raise prices.
It settled at a record closing low of 70.16 against the US dollar on Thursday.
Segment-wise, FCAs -- the largest component of the Forex reserves -- receded by $1.94 billion to $376.26 billion during the week under review.
Besides the US dollar, FCAs consist of nearly 20-30 per cent of major global currencies. The individual movements of these currencies against the US dollar impacts the overall reserve value.
"A consistent decline in reserves show that the RBI is continuously intervening in the market to protect the rupee," Rushabh Maru, Research Analyst, Anand Rathi Shares and Stock Brokers, told IANS.
"Another reason is the fact that foreign currency assets include the effect of appreciation or depreciation of the currencies such as Euro, Pound etc held in the reserves. Since Euro and Pound both have depreciated sharply in recent months, the fall in valuation is also the reason for decline in the reserves."
However, the value of the country's gold reserves increased by $145.6 million to $20.69 billion.
The country's SDRs' value slipped by $9.2 million to $1.46 billion, while the country's reserve position with the IMF inched down by $9.2 million to $2.45 billion.
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One person questioned in Saif Ali Khan attack case
Mumbai: Mumbai Police brought a person to the Bandra police station on Friday for questioning, over 30 hours after an alleged attack on actor Saif Ali Khan at his apartment in the ‘Satguru Sharan’ building.
According to officials, the police formed 20 teams and utilised their network of informers to locate and arrest the suspect.
The crime branch and local police are also analysing technical data, including the number of active mobile phones in the area during the incident, which is being investigated as a “burglary attempt.”
