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India's forex reserves fall by another $2.6 billion
"FIIs turning into buying mode is a positive for the equity market, however, due to the ongoing global uncertainties, domestic retail investors lack the confidence to take fresh positions," said Vinod Nair, Head of Research at Geojit Financial Services.
India's foreign exchange reserves fell by another $2.6 billion in the week to March 18, after nearly $10 billion fall in the week prior to that, as the Reserve Bank of India sold dollars to prevent the rupee's slide amid geo-political turbulence between Russia and Ukraine and tightening of US monetary policy.
The RBI interventions were aimed at mitigating the impact of dollar outflows on account of equity sales by overseas investors.
However, the fall in reserves may be arrested in the last two weeks of the fiscal with foreign institutional investors turning into buying mode in the equity market, slowing down the net dollar outflows, according to experts tracking the markets.
"FIIs turning into buying mode is a positive for the equity market, however, due to the ongoing global uncertainties, domestic retail investors lack the confidence to take fresh positions," said Vinod Nair, Head of Research at Geojit Financial Services.
"We might witness the rupee appreciating further next week towards 76 levels as foreign-currency inflows are expected next week, which usually is seen at the end of the financial year," said Sriram Iyer, Senior Research Analyst at Reliance Securities.
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