Central bank steps up dollar sales
The country’s foreign exchange reserves fell $2.6 billion for the week ended May 18 to $415 billion, latest data released by Reserve Bank of India showed.
In the last one month, foreign exchange reserves fell by about $11 billion as the central bank stepped up intervention in the currency market as rupee came under pressure following rise in crude oil prices. Rising oil prices pose threat to macroeconomic stability as the country imports 80% of its crude requirements.
Foreign exchange reserves touched a record high of $426 billion for the week ended April 13, 2018.
According to the latest data, fall in foreign reserves is primarily due to decline in foreign currency assets.
Rupee strengthens
Rupee, which is the worst performing Asian currency this year, strengthened against the dollar as crude oil prices fell on the prospect of supply increase. On Friday, the rupee posted its biggest single-session gain, as it appreciated by 56 paise or 0.9% to close at 67.78 against the dollar amid a rise in domestic stocks. This is the best single-day rise for the rupee since March 14, 2017. The rupee on Friday touched a high of 67.70 in the intra-day trade.
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