Friday, 23 January 2015

Foreign exchange reserves now at all-time high

The reserves rise $2.67 bn for the week ending Jan 16 to $322.14 bn
The of India's (RBI) foreign exchange reserves rose to an all-time high in the week ended January 16.

The central bank has kept mopping dollar flows into India, so as to protect against the outflows which are expected when the US Federal Reserve begins raising its interest rates later this year.

Data issued on Friday  showed the forex reserves rose $2.67 billion for the week ended January 16 to $322.1 bn. Foreign currency assets rose $2.7 bn to $297.5 bn.

“Given that commodities and especially oil prices are at where they are, we expect the current account deficit (CAD) to be much lower this year. We expect the balance of payments to be positive, as high as a $50-bn surplus for this calendar year and, therefore, the accretion of reserves ought to continue,” said Ananth Narayan, regional head, financial markets, Standard Chartered Bank.

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