Forex reserves fall 1.7 billion to $596 billion

Forex reserves fall 1.7 billion to $596 billion

India s forex reserves fell by 1.7 billion to around $596 billion for the week ended May 6, the day LIC of India opened its initial public offer for general subscriptions. The foreign currency assets fell by nearly $2 billion, but gold reserves were up by 135 million. This was the eighth consecutive contraction of forex reserves, now slipping below the $600 billion mark, which the central bank is aiming to protect. The pace of the fall was reduced this time around. The reserves are likely to bounce back from next week onwards, said a currency market analyst. The subscription window was closed on May 9 with the LIC of India closing the subscription window. The local unit hit a new all-time low on Monday at 77.53 per dollar, but broke the record on Thursday at 77.63. The central bank was seen intervening in the market via futures, non-deliverable offshore forwards and spot markets. The purpose of selling dollars in futures and overseas derivatives is to protect the forex reserves. The Rupee was a bit weaker against the dollar on Friday. The local unit was 77.45 per dollar, compared to 77.42 Thursday.