India's foreign exchange reserves have not suffered much in January from the Reserve Bank of India (RBI) selling dollars.
Inflows by way of portfolio money, non-resident deposits and overseas loans seem to have bolstered the reserve position.
The forex reserves, which stood at 296.6 in December, were at 293.9 by end of January, latest data show.
In a bid to stem the slide in the rupee, the RBI sold foreign currency worth $ 7.3 billion in January 2012.
RBI's foreign currency assets have fallen by $2.8 billion in the month of January, much lower than warranted by RBI's dollar sales.
Deposits from non-resident Indians and returning foreign investments seem to have made up for the depletion of dollars and helped the reserves position. For instance, FII inflows have risen by more than doubled between December and January, bringing in $5.4 billion in January. Foreign direct investment inflows were $2 billion compared to $1.35 billion in December 2011.
Overseas borrowings by companies have also been liberalised during the period. All these moves would have aided foreign inflows into the country. From January-end to March 2 2012, forex reserves saw just a 0.2 per cent fall to $259.6 billion.
Decline in sale price
In January, RBI sold dollars at an average Rs 51.5 a dollar suggesting that much of the intervention took place during the first half of January. The rupee had strengthened to 49.6 by the end of January.