Pace of accretion in forex kitty to slow down

FPJ BureauUpdated: Thursday, May 30, 2019, 02:51 AM IST
article-image

Mumbai : The dip in foreign investor flows and the widening current account deficit will impact the forex reserves accretion, says a foreign bank. “Looking ahead, the pace of reserves accumulation is likely to moderate on slower portfolio inflows and a wider current account deficit,” Singaporean lender DBS said Tuesday. It can be noted that forex kitty had touched a lifetime high of over $400 billion last month, but have fallen for three consecutive weeks after that.

The bank said any deterioration in the global risk- appetite will also require Indian authorities to dip into reserves to defend the rupee against market volatility, but added the current stock is “sufficient to cushion” against external vulnerabilities.

On the fund inflows front, it said the first half of the calendar year saw strong inflows from portfolio investors which averaged $3.8 billion per month till June, but the same came down to $0.4 billion in August.

(To receive our E-paper on whatsapp daily, please click here. To receive it on Telegram, please click here. We permit sharing of the paper's PDF on WhatsApp and other social media platforms.)

RECENT STORIES

SEBI to make it easier for govt to slash stakes in public sector firms

SEBI to make it easier for govt to slash stakes in public sector firms

Rupee doing well as compared to other currencies against US dollar, says World Bank economist

Rupee doing well as compared to other currencies against US dollar, says World Bank economist

World Bank says Indian govt set to meet fiscal deficit target of 6.4%

World Bank says Indian govt set to meet fiscal deficit target of 6.4%

Fitch places India among fastest-growing markets, retains forecast at 7%

Fitch places India among fastest-growing markets, retains forecast at 7%

Creation of SPV for specific project approved by REC Power's board

Creation of SPV for specific project approved by REC Power's board