India's foreign exchange reserves rose by $858 million to $318.358 billion in the week ended October 21, according to Reserve Bank of India's ‘Weekly Statistical Supplement'.
In the previous week ended October 14, India's foreign exchange reserves rose by $5.269 billion to $317.50 billion
The reserves increased on account of a $861 million rise in the foreign currency assets, taking it to $282.514 billion. Foreign currency assets expressed in US dollar terms include the effect of appreciation or depreciation of non-US currencies such as the euro, sterling and yen held in reserves.
In the week under consideration, the euro strengthened against the dollar from $1.3737 on Monday to $1.3896 on Friday.
India's reserve position at the International Monetary Fund in the week under review declined by $1 million to $2.635 billion.
SDRs also declined by $2 million to $4.542 billion, while gold reserves remain unchanged at $28.667 billion.
Rupee may strengthen
The rupee is expected to strengthen further if euro continues to remain firm against the dollar. There could also be dollar selling in anticipation of inflows from foreign funds, due to a likely rise in local share market, said dealers.
However, dollar demand from importers at higher levels may limit a sharp rise in the rupee around 48.45-48.50 per dollar.