<p>The biggest jump in India's foreign exchange reserves in more than a year was prompted by the country's central bank buying up dollars and on account of revaluation, analysts said on Monday.</p>.<p>India's foreign exchange reserves rose by $14.7 billion in the week through Nov. 11 to $544.72, data released on Friday showed. It was the largest accretion to reserves since August last year.</p>.<p>"I think the RBI did some major dollar buying (in that week) and continued to buy," said Abheek Barua, chief economist at HDFC Bank.</p>.<p>"Combine that with the fairly large revaluation on account of the dollar's decline, and we have this increase in reserves."</p>.<p>The reserves had dropped to their lowest level in over two years in mid-October to about $525 billion. It has since recovered, thanks to the dollar’s pullback and possible purchases by the Reserve Bank of India.</p>.<p>In the week ended Nov. 11, the dollar index plunged 4 per cent. Expectations that the US Federal Reserve will slow the pace of rate hikes after softer-than-expected inflation data fuelled the biggest decline in dollar index in more than two years.</p>.<p>Longer-dated and shorter-maturity Treasury yields declined about 30 basis points that week.</p>.<p>Nearly half the increase in reserves is attributed to the dollar's fall and the decline in US yields, said Vivek Kumar, an economist at QuantEco Research.</p>.<p>The rupee rose about 2 per cent against the dollar in that week, hovering around 80.80.</p>.<p>"From the RBI's point of view, it was a good opportunity to buy dollars and rebuild reserves," Kumar said.</p>.<p>"They would have definitely done that because the near $14 billion increase in reserves can't alone be explained by revaluation and forward dollar deliveries."</p>.<p>Forward dollar deliveries refer to the central bank taking deliveries of the US currency from its forward book. The central bank had a net outstanding forward purchase position of $10.4 billion, according to RBI's latest monthly bulletin.</p>.<p>Meanwhile, the central bank's likely dollar purchases come amid a revival in foreign equity inflows. Overseas investors bought $3.7 billion of Indian equities so far this month, according to data from NSDL.</p>
<p>The biggest jump in India's foreign exchange reserves in more than a year was prompted by the country's central bank buying up dollars and on account of revaluation, analysts said on Monday.</p>.<p>India's foreign exchange reserves rose by $14.7 billion in the week through Nov. 11 to $544.72, data released on Friday showed. It was the largest accretion to reserves since August last year.</p>.<p>"I think the RBI did some major dollar buying (in that week) and continued to buy," said Abheek Barua, chief economist at HDFC Bank.</p>.<p>"Combine that with the fairly large revaluation on account of the dollar's decline, and we have this increase in reserves."</p>.<p>The reserves had dropped to their lowest level in over two years in mid-October to about $525 billion. It has since recovered, thanks to the dollar’s pullback and possible purchases by the Reserve Bank of India.</p>.<p>In the week ended Nov. 11, the dollar index plunged 4 per cent. Expectations that the US Federal Reserve will slow the pace of rate hikes after softer-than-expected inflation data fuelled the biggest decline in dollar index in more than two years.</p>.<p>Longer-dated and shorter-maturity Treasury yields declined about 30 basis points that week.</p>.<p>Nearly half the increase in reserves is attributed to the dollar's fall and the decline in US yields, said Vivek Kumar, an economist at QuantEco Research.</p>.<p>The rupee rose about 2 per cent against the dollar in that week, hovering around 80.80.</p>.<p>"From the RBI's point of view, it was a good opportunity to buy dollars and rebuild reserves," Kumar said.</p>.<p>"They would have definitely done that because the near $14 billion increase in reserves can't alone be explained by revaluation and forward dollar deliveries."</p>.<p>Forward dollar deliveries refer to the central bank taking deliveries of the US currency from its forward book. The central bank had a net outstanding forward purchase position of $10.4 billion, according to RBI's latest monthly bulletin.</p>.<p>Meanwhile, the central bank's likely dollar purchases come amid a revival in foreign equity inflows. Overseas investors bought $3.7 billion of Indian equities so far this month, according to data from NSDL.</p>