The Hindu Business Line : Forex reserves surge $863 m

Forex dealers and analysts ascribe the rise in reserves to the mopping up of dollar liquidity by the apex bank that week, to check any sharp appreciation in the domestic currency on account of substantial inflows. The rupee ended that week at 47.6250/6300 levels.

The week before that, reserves had registered a decline on account of pre-payment of ADB and World Bank loans by the Government. Forex reserves had come down to $72.877 billion in the week ended February 28.

Meanwhile, the Indian currency ended at 47.6550 levels on Thursday, March 13. The market witnessed some demand for the greenbacks from oil companies and other corporates, but remained range-bound on account of adequate supplies that offset the demand. All financial markets remained closed on Friday on account of Moharram.

While on the geo-political front, the threat of the US-Iraq war continues to loom large, dealers said, that the rupee is unlikely to be impacted in a major way. "The lowest we see the rupee at is around 47.80 levels. The inflows are good, reserves comfortable, there is no major reason for worry. However, one will have to keep an eye on oil prices. As of now it looks like the market can weather this storm," said a forex dealer with a public sector bank.

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