MUMBAI, July 11: The country's foreign exchange reserves have fallen by $ 206 million to $ 27.07 billion for the week ended July 3. The fall has been primarily due to a dip in the gold reserves which has fallen by $ 78 million and special drawing rights (SDR) which has fallen by $ 72 million. The foreign currency assets fell by $ 56 million and stood at $ 24.04 billion for the week ended July 3.With this, forex reserves of the country had fallen by $ 1.406 billion after June 1. The decline in the last three amounted to $ 2.20 billion. ``The fall has accelerated after the nuclear explosion, sanctions and downgrading,'' said a forex dealer.
However, the central bank has not used much of its dollar reserves to prop up the rupee against the dollar. "RBI has been following a hands-off policy in the forex market allowing market forces to determine the direction of the rupee. Finance Minister Yaswant Sinha has also gone on record saying that forex reserves would not be used to strengthen the rupee," said aforeign dealer.
The government is expecting dollar inflow of 2 billion through the proposed Resurgent Indian Bonds (RIB) issue. State bank of India will be launching the scheme for non resident Indians by the middle of July and has fixed an interest rate of 7.5 per cent. It has several tax breaks comparable to the FCNR (B) scheme.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
