05-04-2005, 10:09 PM
<b>India seen cutting its dollar reserves</b><!--QuoteBegin-->QUOTE<!--QuoteEBegin-->Fears of a weakening appetite for dollars among Asian central banks were re-ignited on Tuesday when India became the latest nation to talk of reserve diversification.
India is secretive about the composition of its reserves, which have ballooned by $13.5bn since January to a record $142.6bn, the sixth largest in the world.
But S.S. Palanimanickam, the junior finance minister, said in a written reply to a question about New Delhi's exposure to the dollar: "Appropriate adjustments are made in the currency composition of foreign exchange reserves from time to time depending on various considerations . . . like benefits from diversification of currency risk."
The euro is an important currency for the Reserve Bank of India, he added in comments that will intensify speculation that New Delhi may be looking to reduce its exposure to the dollar.
India caused some jitters for the dollar earlier in the year when it approved plans to use its forex reserves as collateral to fund infrastructure investment, even though such spending has been limited to $2.3bn in the next 12 months.
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India is secretive about the composition of its reserves, which have ballooned by $13.5bn since January to a record $142.6bn, the sixth largest in the world.
But S.S. Palanimanickam, the junior finance minister, said in a written reply to a question about New Delhi's exposure to the dollar: "Appropriate adjustments are made in the currency composition of foreign exchange reserves from time to time depending on various considerations . . . like benefits from diversification of currency risk."
The euro is an important currency for the Reserve Bank of India, he added in comments that will intensify speculation that New Delhi may be looking to reduce its exposure to the dollar.
India caused some jitters for the dollar earlier in the year when it approved plans to use its forex reserves as collateral to fund infrastructure investment, even though such spending has been limited to $2.3bn in the next 12 months.
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