India's forex reserves increase by $1.4 bn

Mumbai, April 3: India’s foreign exchange reserves increased by $1.38 billion to $341.37 billion for the week ended March 27, the Reserve Bank of India (RBI) data showed on Friday. According to alysts, the Indian reserves are being build up by the Reserve Bank of India (RBI) to absorb any future global fincial shock that was witnessed in June 2013. “The RBI is building up the reserves to counter any future fincial shocks like the one which was witnessed at the time the tapering announcements were made. Apart from that, the reserves will also act as a support to the Indian rupee,” Anindya Banerjee, Kotak Securities senior mager, currency derivatives, told IANS. “The Indian rupee is very stable currently and the reserves will make sure that it will remain so. A healthy reserves will make sure that any other exterl shocks are taken care of,” Banerjee added. The RBI is cautious about the US Fed’s stand that the rate hike might take place in the later part of the year. With higher interest rates in the US, the foreign portfolio investors (FPIs) are expected to be led away from the emerging markets such as India. The US Fed dropped an assurance to be “patient” in raising interest rates and siglled the hike could come by mid to late this year. “Just because we removed the word patient from our statement doesn’t mean we will be impatient,” Janet Yellen, US Federal Reserve Board chairman said at a press conference after a globally-awaited meeting of the policy committee on March 18. (IANS)