Forex reserves jump $3.5 billion to close in on $400 billion mark

Mumbai: India's foreign exchange reserves inch closer to the $400 billion supported by strong inflows from foreign investors into indian markets along with movement in gold reserves with the central bank as per data from the RBI released on Friday.

According to sources in the market, there could be a very rare movement of gold reserves with the RBI which went up by almost $750 million to reach $20.6 billion as on September 1.

"The increase in gold reserves is a big positive and could be mainly driven by lessening of uncertainty over imposition of Goods and Services Tax which could have driven up demand for gold in the market," said Soumya Kanti Ghosh, chief economist, State Bank of India.

Bankers say accumulation of gold as reserves is also a strong point for the central bank as it is considered to be a safe haven much like Dollar.

Besides change in gold reserves the strong inflow of foreign currency into Indian equity and debt markets would have also helped the central bank to shore up its reserves, said market sources.

According to data shared by NSDL, foreign investors have pumped in Rs 956 crore in the month of August taking their total investments for the year to Rs 1.7 lakh crore as of the second week of September.

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