India’s forex reserves have increased by USD 1.919 billion to USD 642.019 billion for the week ended October 29 on a healthy increase in the currency assets and value of gold, the Reserve Bank said on Friday. The overall reserves had declined by USD 908 million to USD 640.1 billion at the end of the previous reporting week.
Foreign currency assets, a major part of the overall reserves, increased by 1.363 billion to USD 578.462 billion for the reporting week, the RBI said in the weekly data.
Expressed in dollar terms, the foreign currency assets include the effect of appreciation or depreciation of non-US units like the euro, pound and yen held in the foreign exchange reserves.
Value of the gold reserves increased by USD 572 million to USD 39.012 billion in the reporting week, the data showed.
The special drawing rights (SDRs) with the International Monetary Fund (IMF) rose by USD 17 million to USD 19.304 billion. The country’s reserve position with the IMF increased by USD 1 million to USD 5.242 billion in the reporting week, the data showed. Also Read:
“India’s merchandise exports in October 2021 was USD 35.47 billion, an increase of 42.33 per cent over USD 24.92 billion in October 2020 and an increase of 35.21 per cent over USD 26.23 billion in October 2019,” as per an official statement.
At the interbank forex market, the rupee opened strong at 74.64 against the greenback and later gained strength to settle at 74.46, a level not seen since October 5. The local unit moved in a range of 74.46 to 74.64 in the day trade.
NEW YORK -The dollar edged lower against a basket of major currencies on Friday, on track to end its five-week winning streak, as global risk appetite rebounded, helping reduce demand for the safe-haven currency.
Global stock markets have rallied this week as fears about a stagflationary economy have been eased by forecast-beating corporate earnings in the United States.
Unexpectedly strong U.S. retail sales data for September also boosted sentiment. Retail sales rose 0.7% last month, versus expectations of a 0.2% decline, helped in part by higher prices.
“The risk appetite here remains really, really strong for the time being,” said Boris Schlossberg, managing director of FX strategy at BK Asset Management.
“That’s helping the high beta currencies like the pound, the euro and the Aussie, simply because the market is feeling much more positive,” he said.
The dollar index initially firmed after the retail sales data, but then trended lower and was last down 0.106% at 93.941. The greenback was down 0.19% for the week, after having appreciated for the previous five weeks, and hitting a one-year high of 94.563 on Tuesday.
The big run-up in dollar strength, based on expectations that the U.S. Federal Reserve may begin hiking rates sooner than had been anticipated, may have been overblown, and the dollar is now consolidating, said Marc Chandler, chief market strategist at Bannockburn Global Forex.
“Next week will help clarify whether we are consolidating, and whether the consolidation is just like a breath that refreshes or is a prelude for a correction,” he said.
The greenback had rallied against its major peers since early September on expectations the U.S. central bank would tighten monetary policy more quickly than previously expected amid an improving economy and surging energy prices.
Minutes of the Fed’s September meeting confirmed this week that a tapering of stimulus is all but certain to start this year, although policymakers are sharply divided over inflation and what they should do about it.
Money markets are currently pricing in about 50/50 odds of a 25 basis point rate hike by July.
Sterling rose 0.57% to $1.3765, hitting its highest since Sept. 17, while the euro edged down 0.03% to $1.1595 after touching $1.1624 on Thursday for the first time since Sept. 4.
The risk-sensitive Aussie dollar added 0.02% to $0.7417, having climbed to $0.7439 earlier in the session. New Zealand’s dollar jumped 0.54% to $0.7068, extending Thursday’s 1% surge.
The Japanese yen was the biggest loser, dropping to as low as 114.46 yen per dollar, its weakest since October 2018. The yen is a safe-haven currency and has been knocked by the rebound in risk sentiment including in Asia. The dollar was last up 0.53% against the yen at 114.28 yen.
In cryptocurrency markets, the price of bitcoin topped $60,000 for the first time in six months and was not far from its record high on bets U.S. regulators will approve a bitcoin futures exchange traded fund.
During the reporting week ended October 8, the rise in the reserves was on account of an increase in the Foreign Currency Assets (FCAs), Reserve Bank of India’s (RBI) weekly data released on Friday showed.
The country’s foreign exchange reserves dipped by USD 1.169 billion to stand at USD 637.477 billion in the week ended October 1, RBI data showed on Friday. In the previous week ended September 24, 2021, the reserves had declined by USD 997 million to USD 638.646 billion. The reserves had surged by USD 8.895 billion to a lifetime high of USD 642.453 billion in the week ended September 3, 2021.
During the reporting week ended October 1, 2021, the dip in the forex kitty was on account of a fall in the foreign currency assets (FCAs), a major component of the overall reserves.
FCAs declined by USD 1.28 billion to USD 575.451 billion, as per weekly data by the Reserve Bank of India (RBI).
Expressed in dollar terms, the foreign currency assets include the effect of appreciation or depreciation of non-US units like the euro, pound and yen held in the foreign exchange reserves.
Gold reserves were up by USD 128 million to USD 37.558 billion in the reporting week, the data showed.
The special drawing rights (SDRs) with the International Monetary Fund (IMF) declined by USD 138 million to USD 19.24 billion.
The country’s reserve position with the IMF increased by USD 122 million to USD 5.228 billion. Also read:
“Real GDP in the current fiscal year is expected to grow by 8.3%, which is consistent with the last forecast from June 2021, and a 1.8 percentage point downward revision from the forecast in March 2021,” said the World Bank’s Fall 2021 economic update for South Asia.
“The sequential momentum in growth has slowed down or moderated a bit in the September quarter; it is likely to pick up in the December and the March quarter starting with the festive season spends.”
MUMBAI: The Indian rupee appreciated 4 paise to 73.25 against the US dollar in opening trade on Tuesday, tracking a positive trend in domestic equities.
At the interbank foreign exchange, the rupee opened at 73.26 against the dollar, then inched higher to 73.25, up 4 paise over its previous close.
On Monday, the rupee had settled at 73.29 against the US dollar.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was down 0.12 per cent at 92.54.
A strong rally in the domestic equity markets and a weak American currency in the overseas markets also supported the rupee sentiment.
According to Anil Kumar Bhansali, Head of Treasury, Finrex Treasury Advisors, the rupee which has appreciated nearly 100 paise since Friday, has been gaining on bountiful corporate inflows.
“RBI has been present intermittently and equity inflows have also been aiding the rupee after FED rhetoric on Friday,” he added.
The US Fed chief Jerome Powell’s speech at Jackson Hole Symposium was ‘dovish’ and expressed hope that the Fed will keep supporting the market with low interest rates, traders said.
Global oil benchmark Brent crude futures fell 0.48 per cent to USD 73.06 per barrel.
On the domestic equity market front, BSE Sensex was trading 87.09 points or 0.15 per cent higher at 56,976.85, while the broader NSE Nifty advanced 21.55 points or 0.13 per cent to 16,952.60.
Foreign institutional investors were net buyers in the capital market on Monday as they purchased shares worth Rs 1,202.81 crore, as per exchange data.
TOKYO: The dollar headed for its worst back-to-back weekly drop this year amid a continued retreat in Treasury yields from more-than-one-year highs as investors increasingly bought into the Federal Reserve’s insistence of continued monetary support.
The benchmark 10-year Treasury yield dipped to a one-month low of 1.528% overnight, from as high as 1.776% at the end of last month, even in the face of Thursday’s stronger-than-expected retail sales and employment data.
San Francisco Fed President Mary Daly said the same day that the U.S. economy is still far from making “substantial progress” toward the central bank’s goals of 2% inflation and full employment, the bar the Fed has set for beginning to consider reducing its support for the economy.
The dollar index, which tracks the greenback against six major peers, dipped to an almost-one-month low of 91.487 overnight before recovering somewhat to 91.678 early in the Asian session.
It’s set for a 0.6% decline for the week, extending the 0.9% slide from the previous week.
The gauge, also known as the DXY, surged with Treasury yields to an almost-five-month high at 93.439 on the final day of March, on bets that massive fiscal spending coupled with continued monetary easing will spur faster U.S. economic growth and higher inflation.
But bond and foreign-exchange markets now seem willing to give the Fed the benefit of the doubt that inflation pressure will be transitory and monetary stimulus will remain in place for years to come.
The dollar is “still struggling to find its feet in April, even though the U.S. macro outperformance narrative could not be more propitious,” Westpac strategists wrote in a research note.
“The DXY is trading like its topping out now, sooner than (we) expected.”
Retail sales increased 9.8% last month, beating economists’ expectations for a 5.9% increase, while first-time claims for unemployment benefits tumbled last week to the lowest level in more than a year, separate reports showed Thursday.
The dollar traded at 108.68 yen, heading for a 0.9% loss for the week, about the same as the previous week.
The euro changed hands at $1.1964, set for a 0.5% weekly advance, adding to the previous period’s 1.3% surge.
In cryptocurrencies, Bitcoin stood around $63,478, near the record high of $64,895 reached on Wednesday, when cryptocurrency platform Coinbase COIN.O made its debut in Nasdaq in a direct listing.
The Russian rouble tumbled on Thursday, at one point losing 2% to the dollar in volatile trade and hitting a more than five-month low versus the euro as the White House announced new sanctions targeting Russia’s sovereign debt.
U.S. President Joe Biden on Thursday authorized the move to punish Moscow for interfering in the 2020 U.S. election, allegations Russia denies.
Nifty bank index traded Green at Rs 32,339 adding 1.06%, while BSE Bankex ended at 36,450 adding 0.62%.
Shares that contributed the most were- IDFC First Bank at Rs 47 adding 6.07% followed by Bank of Baroda at Rs 70 (10.12%), PNB at Rs 36 (4.58%), SBI at Rs 292 (3.54%), HDFC Bank at Rs 1,481 (2.04%). While all the other major indices remained green, Kotak Mahindra traded lower at Rs 1,903 (-1.79%), Bandhan Bank at Rs 391 (-4.15%) and Induslnd Bank at Rs 927 (-0.16%).
Nifty Financial Services ended at 15,711 adding 0.68%. Amongst the top gainer were Cholamandalam at Rs 443 adding 3.81% followed by Power Finance at Rs 121 (1.42%), Bajaj finance at Rs 5,042 (1.16%), Indiabulls Hsg at Rs 234 (0.13%). Bajaj Finserv shares traded lower at Rs 8,959 (-0.30%) along with HDFC Shares at Rs 2,747 (-0.13%).
Other key takeaways
India’s GNPA could double by September The central bank on Monday said that the gross non-performing asset (GNPA) ratio of banks could double to reach 13.5% by September this year in a base scenario while on the higher side it is expected to reach 14.8%. The GNPA ratio is used to assess loan losses in the banking sector.
The RBI in the report said that if a severe stress situation occurs the bad loan ratio of the banking system could be the highest since March 1997, when it stood at 15.7%.
PSU Banks under strain “Two important developments are: bond yields rising in the US and the dollar index again rising above 90. Both these are negatives from the emerging market perspective, but FII inflows continue to be robust, pushing markets higher. Meanwhile the RBI in its Financial Stability Report expressed concern about high potential NPAs of the banking system which may rise above 14%.
PSU banks are likely to be under strain.The well-capitalized large private sector banks are strong and are likely to gain from the woes of the PSU banks,” said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Rupee ends at days high With the dollar Index and US yields rising and RBI warning on stock markets/asset prices it seems that we may see some risk aversion in near term. Indian rupee recovered from the lows and ended at day’s high at 73.25 per dollar, amid buying saw in the domestic equity market. It opened marginally lower at 73.42 per dollar against previous close of 73.38 and remained in the range of 73.24-73.47.
Gold Updates Gold prices in India rebounded to trade flat with a positive bias on the Multi Commodity Exchange (MCX) Tuesday tracking a mixed trend in the international spot prices, while silver prices also traded flat.
Gold futures for February delivery rose 0.09% to Rs 49,383 per 10 grams as against the previous close of Rs 49,341 and the opening price of Rs 49,320 on the MCX. Silver futures traded 0.10% higher at Rs 65,619 per kg. The prices opened at Rs 65,444 as compared to the previous close of Rs 65,555 per kg.
US stocks finish lower with new risks: A slide in shares of technology giants weighed on the broader market Monday as investors grew wary of the potential for heightened regulation tied to the market’s most enduring winners.
The S&P 500 declined 25.07 points, or 0.7%, to 3799.61 after hitting a record on Friday. The tech-heavy Nasdaq Composite dropped 165.54 points, or about 1.3%, to 13036.43. The Dow Jones Industrial Average shed 89.28 points, or 0.3% to 31008.69.
