India’s foreign exchange reserves dipped for the second consecutive by $1.542 billion to $365.5 billion in the week ended November 18, the Reserve Bank of India said. The country’s forex reserves had gone down by $1.19 billion to $367.04 billion in the previous week.
In a surprise move, RBI ordered banks to maintain incremental CRR (cash reserve ratio) of 100% on the increase in NDTL (net demand and time liabilities) between September 16, 2016 and November 11, 2016 from the fortnight beginning November 26, 2016. This action is estimated to suck out around Rs3-3.5tn of surplus liquidity from the banking system.
US dollar index witnessed sharp retracement, with values retreating from the high of 102 and now trading slightly above 100.5. We sense that the recent softness in the greenback will be short-lived, as market focus is clearly accentuated on the forthcoming US FOMC policy meeting on December 14th, wherein the expectations call for a certain rate hike.
The Indian Rupee closed higher by 27 paise at 68.46/$ on Friday. The local unit hit a high of 68.42/$ and a low of 68.46/$ today.
The Reserve Bank of India’s (RBI) reference rate for the dollar stood at 68.46 while for the Euro it was 72.38. The RBI’s reference rate for the Yen stood at 60.32; reference rate for the Great Britain Pound (GBP) stood at 85.2222.