News: Forex reserves decline by $701 m

(BL 19/08/2006) Mumbai - Forex reserves have declined by $ 701 million due to a decrease in foreign currency assets. According to the Reserve Bank of India's Weekly Statistical Supplement, the reserves fell by $ 701 million to touch $ 165.094 billion for the week ended August 11. In the previous week, the reserves had increased by $ 1.772 billion to $ 165.795 billion.

Foreign currency assets decreased by $ 696 million to touch $ 157.769 billion during the week. Foreign currency assets, expressed in dollar terms, include the effect of appreciation or depreciation of non-US currencies such as euro, sterling and yen.

The euro traded between $ 1.2842 and $ 1.2873. "There was a revaluation of currencies during the week under consideration. The dollar had strengthened against the euro due to which the forex reserves kitty shows a decline," said a dealer at a private bank. There was an FII inflow of around $ 189.4 million into the equity market during the week under consideration.

Gold reserves remained unchanged at $ 6.557 billion. The reserve position in the IMF increased by $ 1 million to touch $ 767 million. Special Drawing Rights have shown a decrease of about $ 6 million to touch $ 1 million.

Dealers said the rupee was expected to be range-bound.