India's forex reserves surged by a USD 5.04 billion to USD 291.3 billion in the week ended November 29, the biggest weekly gain since October 2011, helped by RBI's concessional swap windows opened in August as parts of efforts to arrest rupee fall.
The unconventional measures employed by the central bank saw the bank receiving a whopping USD 34 billion from the two swap windows which closed last week.
As of November 29, the forex kitty swelled by USD 5.04 billion at USD 291.3 billion, the Reserve Bank said today.
The reporting week's gain is the biggest weekly gain since the week ended October 14, 2011, when it jumped USD 5.2 billion. The biggest weekly forex gain was recorded on the week ending July 1, 2011 when the reserves zoomed USD 6.7 billion.
The current reserves however, are still down USD 3.29 billion from the year-ago period, according to the RBI data.
Since the new Governor Raghuram Rajan took over on September 4, the forex reserves have gained by USD 13.6 billion from USD 277.72 billion on August 30.
The RBI announced a swap window for foreign currency non- resident (bank) deposits on September 4 after the import cover or balance of payment position became precarious on the back of massive fund outflows following the US Fed's tapering talk on May 17.
The special window allowed banks to swap fresh FCNR-B dollar funds, mobilised for a minimum tenor of three years, at a fixed rate of 3.5 per cent per annum.
The RBI also allowed banks to borrow up to 100 per cent of their tier-I capital from overseas, which could be swapped with the central bank at a concessional rate of 100 basis points (1 percentage point) below the ongoing swap rate prevailing in the market.
The RBI closed these swap windows for FCNR-B funds and banks' overseas borrowings on November 30.
"The reserves rose as amount mobilised through both the swap windows came into the RBI's kitty," said a treasurer at a state-owned bank.
