India's foreign exchange reserves rose to $100.590 billion in the week ended December 26 from $100.049 billion the previous week, the Reserve Bank of India (RBI) said in its weekly statistical supplement on Saturday.
The RBI said the foreign currency assets expressed in US dollar terms included the effect of appreciation/depreciation of other currencies held in its reserves such as the euro, pound sterling and yen.
The Indian central bank asked commercial banks to raise the margin on all advances made by them against shares or for financing participation in Initial Public Offerings to 50 percent from 40 percent, with immediate effect.
The Reserve Bank of India said in a statement it had also asked banks to raise the minimum cash margin on guarantees issued by banks for capital market operations to 25 percent, from 20 percent till now.
The move comes in the backdrop of a dizzying climb of over 73 percent by India's main share index in 2003 and analysts said the central bank was signalling authorities' concern with the pace at which shares have been rising in recent weeks.
"Someone needed to cool the overheated market down a bit and this is a welcome step and a clear signal that authorities want all the participants to slow down," said Raamdeo Agrawal, managing director at Motilal Oswal Securities.
The benchmark Bombay stock index rose to its highest ever close on Friday, finishing 1.88 percent up at 6.026.59 points, as investors went on a frenzied buying spree ahead of next week's earnings season.
Analysts however doubted the move would have a lasting impact on the current bull market.
"The market is likely to shrug it off after the first hour or so, since no one wants the party to end right now," said Agrawal. "In a runaway market like this it takes more than one warning for the message to be heard and understood".
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