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Forex reserves slip below $300-billion mark

Foreign exchange reserves continued their slide for the second consecutive week, falling by over $4.18 billion to $296.69 billion, slipping below the long-held $300-billion mark.

business Updated: Jan 06, 2012 21:35 IST

Foreign exchange reserves continued their slide for the second consecutive week, falling by over $4.18 billion to $296.69 billion, slipping below the long-held $300-billion mark.

The huge drop in the reserves in the week ended December 30 was a result of a fall in the core foreign currency assets (FCAs) and gold reserves, the Reserve Bank said on Friday.

The overall reserves had slipped by $1.23 billion to $300.86 billion in the previous reporting week.

FCAs, a major component of the forex kitty, fell by $2.72 billion to $262.93 billion for the week under review, according to the RBI data.

FCAs, expressed in US dollars, include the effect of appreciation or depreciation of the non-US currencies such as the euro, pound and yen, held in the reserves.

The gold reserves were down by $1.42 billion to 26.62 billion, the apex bank said.

Faced with massive volatility in the rupee which has seen its value erode by 20 per cent since August, RBI is reported to have arrested or limited the fall by selling its dollar reserves. According to some estimates, it has sold over $4 billion in the recent months.

For the week under review, the special drawing rights also were down by $19 million to $4.43 billion, while India's reserve position in the International Monetary Fund slipped by $12 million to $2.71 billion, the data showed.