The jump in the forex kitty was buoyed by the dedicated dollar-mobilisation programme, which surpassed market expectations.
The foreign currency assets swelled even higher — by $47.498 billion in the reporting week — to $648.168 billion, Reserve Bank of India‘s latest weekly statistical bulletin showed. Reserves held in gold contracted by $2.594 billion to $34.944 billion.
The forex kitty has been on an upward journey for the 10th consecutive week, with a cumulative $119 billion haul, strengthening the central bank’s muscle for forex market intervention.
RBI sold $7.7 billion in the spot market in August to support the local currency and curb volatility while it did not buy dollars.
It has however gained the pile through a special dollar-rupee swap facility with banks, which garnered $136.377 billion through the dedicated dollar-inflow programme in about two-and-half months. Inflows into foreign currency non-resident bank (FCNR-B) deposits alone were $127.226 billion.
“The inflows stabilised the foreign exchange market and helped the sentiment improve,” RBI Governor Sanjay Malhotra said Friday in an interview to CNBC-TV18. He also said that on net basis, the overseas flows would create additional revenue for RBI by way of interest earning on the investments of the additional flows.
The higher-than-expected flow prompted the RBI to close the FCNR-B window on August 31, instead of September 30. The swap facility for FCNR-B inflows ended September 11. The dollar-mobilisation scheme through external commercial borrowing and overseas foreign currency borrowing will continue till December 31.