CURRENT UPDATE: FOREX RESERVES AT SIX MONTH HIGH OF $291.30 BILLION

FOREX RESERVES AT SIX MONTH HIGH OF $291.30 BILLION

India's forex reserves surged by a USD 5.04 billion to USD 291.3 billion in the week ended 29th Nov, the biggest weekly gain since October 2011, helped by RBI's concessional swap windows opened in August as parts of efforts to arrest rupee fall.

The unconventional measures employed by the central bank saw the bank receiving a whopping USD 34 billion from the two swap windows which closed last week. 

As of 29th November, the forex kitty swelled by USD 5.04 billion at USD 291.3 billion, the Reserve Bank said on Friday. 

The reporting week's gain is the biggest weekly gain since the week ended 14th October 2011, when it jumped USD 5.2 billion. 

The biggest weekly forex gain was recorded on the week ending 1st July 2011 when the reserves zoomed USD 6.7 billion. 

The current reserves however, are still down USD 3.29 billion from the year-ago period, according to the RBI data. 

Since the new Governor Raghuram Rajan took over on 4th September, the forex reserves have gained by USD 13.6 billion from USD 277.72 billion on 30th August. 

The RBI announced a swap window for foreign currency non- resident (bank) deposits on 4th September after the import cover or balance of payment position became precarious on the back of massive fund outflows following the US Fed's tapering talk on 17th May. 

The special window allowed banks to swap fresh FCNR-B dollar funds, mobilised for a minimum tenor of three years, at a fixed rate of 3.5 percent per annum. 

The RBI also allowed banks to borrow up to 100 percent of their tier-I capital from overseas, which could be swapped with the central bank at a concessional rate of 100 basis points (1 percentage point) below the ongoing swap rate prevailing in the market. 

The RBI closed these swap windows for FCNR-B funds and banks' overseas borrowings on 30th November. 

"The reserves rose as amount mobilised through both the swap windows came into the RBI's kitty," said a treasurer at a state-owned bank. 

Foreign currency assets, which form a major part of the overall forex reserves, rose by healthy USD 5.071 billion to USD 263.736 billion for the week under review, the RBI said. 

This is the fourth consecutive week when the reserves have jumped and one of the sharpest spikes in recent times. 

In the week ago period, the reserves had risen by USD 2.691 billion to USD 286.26 billion. 

Foreign currency assets expressed in dollar terms include the effect of appreciation or depreciation of the non-US currencies such as the euro, pound and yen, held in reserves. 

During the week under review, the gold reserves continued to remain unchanged at USD 21.227 billion. The special drawing rights rose by USD 12.2 million to USD 4.432 billion. 

The country's reserve position with the IMF fell by USD 46.2 million to USD 1.905 billion in the week under review, RBI data showed.