Mumbai, Feb 5 (IANS) India's foreign exchange reserves increased by $673.4 million to $293.93 billion for the week ended Jan 27, Reserve Bank of India data showed.

The forex reserves have risen for the second week after six straight weeks of decline.

They had increased by $731.8 million for the week ended Jan 20 after slumping by $14.25 billion in the previous six weeks.

A strong rally in the Indian equities markets and rebound in the value of rupee on the back of huge inflow of funds from overseas investors have helped in increase in the foreign exchange reserves.

Since the beginning of the year, Indian markets have been riding a firm bull rally. The Sensex has shot up 13.91 percent till Feb 3. The Nifty too has shot up 15.17 percent or 701.55 points in little over a month.

Foreign fund flows have also led to a strong recovery in the value of the rupee, helping alleviate worries of investors. The rupee closed Friday at a 3 month high at 48.68 against the dollar.

Strong overseas inflows have also played a big role in the current rally. Since the beginning of the year, foreign institutional investors have pumped in over $2 billion.

Foreign currency assets, the biggest component of the forex reserves kitty, rose by $614.1 million to $260.12 billion for the week ended Jan 27, according to the Reserve Bank of India weekly statistical supplement.

The RBI did not provide any reasons for the change in foreign currency assets.

It said the assets expressed in US dollar terms included the effect of appreciation or depreciation of non-US currencies such as the pound sterling, euro and yen held in reserve.

The value of special drawing rights (SDRs) rose by $36.8 million to $4.46 billion, and India's reserves with the International Monetary Fund (IMF) increased by $22.5 million to $2.72 billion.

However, the value of gold reserves remained unchanged at $26.62 billion.