February 23, 2003	Sunday	Zul Hijjah 21, 1423

MUMBAI, Feb 22: India’s foreign exchange reserves have risen for the 16th straight week to a record high, helped by strong trade inflows, remittances by expatriate Indians and rising foreign investments, traders said on Saturday.

Data released by the central bank showed India’s forex reserves grew $616 million, or 0.8 per cent, to $75.283 billion in the week to February 14, to reach a level high enough to pay for 15 months of imports.

This is despite the rupee losing nearly 0.4 per cent against the US dollar that week due to corporate outflows. The local currency ended at 47.85/86 per dollar, off an intra-day low of 47.9150 on February 14.

It has since gained ground to close at 47.72/7250 per dollar on Friday, but analysts say the rupee is still undervalued by nearly three percent on a trade-weighted basis, indicating potential further upside against the greenback.

The rupee has appreciated by 0.54 per cent so far in 2003, after rising 0.55 per cent in 2002 — its first annual gain against the dollar in a decade.

Steady dollar sales by exporters, continued remittances from expatriate Indians and foreign capital flows are shoring up reserves, said Surendra Rosha, head of treasury sales at HSBC, Mumbai. I expect this trend to continue.

Exports in April-December 2002, the first nine months of the financial year to March, rose 20.36 per cent from the same period of the previous financial year. Forex reserves have jumped by over $16 billion in that period.

This month, the country’s strong external position prompted international ratings agency Moody’s Investors Service to upgrade India’s foreign currency debt and issuer rating to Ba1, the top of the speculative grade, from Ba2.

Analysts say the upgrade, along with a steady relaxation in capital controls by the central bank in recent months that has made it easier for foreigners to repatriate money, has helped draw more investments into India.

Data from the capital market regulator shows foreign funds have so far bought $65.9 million in Indian assets this month, after buying a net $241.7 million in January.—Reuters