Forex kitty declines by $4 billion to $288 billion

The country's foreign exchange reserves declined by a whopping $4.18 billion to $287.89 billion for the week ended May 31, 2013, led by a fall in foreign currency assets and gold reserves, according to the Reserve Bank of India (RBI)'s weekly statistical supplement released on Friday.

Foreign currency assets declined $3.05 billion to $258.50 billion and gold reserves were down $1.14 billion to $22.83 billion, the supplement said.

For the week ended May 24, 2013, the reserves had risen $109.9 billion to $292.07 billion and gold reserves remained unchanged at $23.97 billion. When compared to the reserves of $296.37 billion as on April 26, 2013, the fall as of May 31 is a sharp $8.47 billion.

The decline in reserves is despite foreign institutional investors (FIIs) investing about $4 billion in equity and $1.2 million debt in May this year, taking the total FII inflows in both segments (equity and debt) to $19.85 billion calendar year 2013.