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Forex reserves touch new high at $46.89 bn

India's foreign exchange reserves hit a lifetime high of $46.891 billion on November 30, supported by dollar remittances from expatriates and from foreign direct investment, analysts and traders said on Saturday.

Data released by the Reserve Bank of India on Saturday showed the reserves rose to $46.891 billion, up $260 million from a week ago, with a rise of $335 million in the foreign currency component of the reserves.

"Private remittances into the country have been quite good," said Sanjeet Singh, analyst with ICICI Securities and Finance Company. "Apart from that, some multinationals are bringing in dollars towards direct investments and buy-backs," he added.

Currency market traders said dollars were also coming in from expatriates as deposits. Apart from that, there was the usual inflows from exporters, they said.

Meanwhile, demand for dollars from importers had been limited as imports have been sluggish because of the industrial slowdown. Besides, several had hedged exposures in the forward market after the September 11 attacks on the United States.

There has been a steady inflow of dollar inflows -- both trade and capital -- through 2001 which has caused the country's foreign exchange reserves to steadily climb.

These inflows have helped the rupee withstand shocks. The Indian currency has recovered from a historic low of 48.43 per dollar hit in September after the US attacks to close Friday at a 12-week high of 47.8250/8325.

"The build-up in the reserves could have continued this week (ended December 7) as well because we have seen good inflows from foreign funds," I-Sec's Singh said.

Data for this week will be released next Saturday.

Up to Thursday last week, foreign funds' net investments in Indian shares and bonds was at $81 million.

Foreign funds' net investments in Indian shares and bonds has totalled $2.87 billion so far in 2001.

"Moreover, other flows from foreign direct investments and exporters have been on the higher side this week," a currency trader at a state-owned bank added.

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