MUMBAI: India’s foreign exchange reserves rose $2.6 billion to reach $366.7 billion for the week ended March 17, said the Reserve Bank of India on Friday.
With the Indian equities market reaching record levels and the Rupee appreciating against the dollar, market sources said that the RBI had intervened heavily to control the value of the Indian currency at a specific level.
“The rise can be attributed to the likely maturities in the forwards market and also some spot buying from the regulator as the Rupee had appreciated consistently over the last week,” said Ashutosh Khajuria, executive director, Federal BankBSE 1.70 %.
Sources say that the RBI has been defending the value of Rupee against Dollar at levels around Rs 65.60 and even before that the regulator had intervened to maintain the level at Rs 66.40.
Foreign exchange reserves are likely to rise further as sources say that there could be accretion in the data released in the following weeks as the regulator is thought to have intervened in this week as well.
After a landslide victory of the Bharatiya Janata Party in Uttar Pradesh state elections and also the latest Federal Reserve move to raise interest rates by 25 basis points to 1% the country’s currency reached a 16month high against the dollar last week, prompting intervention of the regulator.
The stock exchanges had also rallied last week closing at 29,648 on last Friday and have maintained the trend, with foreign investors pumping in record money into both Indian equities and debt markets.
As per data from NSDL, the total amount of money pumped into the Indian markets stood at Rs 50811 crore for the current year till March 24.