India's forex reserves dip to $291 bn in week ended Jan 31: RBI

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India's foreign exchange reserves fell in the week ended January 31, 2014 as the Reserve Bank of India (RBI) sold dollars to arrest the slide of the Indian rupee amid the turmoil in emerging markets due to foreign fund outflows following the US Federal Reserve's decision to taper stimulus.

Forex reserves fell by USD 1.17 billion to USD 291.07 billion in the week ended January 31, 2014 from USD 292.24 billion in the previous week amid a decline in foreign currency assets, data from the RBI showed on Friday.

The US Fed paring stimulus for a second straight month, coupled with the contraction in Chinese manufacturing and a sharp slowdown in US manufacturing, led to risk aversion by global investors, resulting in a sharp sell-off in emerging stock markets and currencies.

Foreign currency assets, which are expressed in dollar terms and include the effect of appreciation or depreciation of non US currencies such as euro, pound and yen held in reserves, fell by USD 1.483 billion to USD 264.569 billion in the week ended January 31, 2014 from the previous week, the RBI added.

However, India's gold reserves climbed by USD 351 million to USD 20.076 billion in the week ended January 31, 2014 from the previous week.

Dion Global Solutions Ltd.

Story first published: Monday, February 10, 2014, 9:10 [IST]
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