India’s foreign exchange reserves jumped by $10.47 billion to $636.1 billion for the week ending on March 8, latest data by the Reserve Bank of India (RBI) showed on Friday. This is the biggest surge since the week ended July 14, 2023.
Previously, forex reserves expanded by $6.55 billion to $625.63 billion for the week ended on March 1, 2024.
According to the Weekly Statistical Supplement released by the RBI, Foreign currency assets (FCAs) increased by $8.12 billion to $562.35 billion. Expressed in dollar terms, the FCAs include the effect of appreciation or depreciation of non-US units like the euro, pound and yen held in the foreign exchange reserves.
Gold reserves expanded by $2.3 billion to $50.72 billion, whereas SDRs were up by $31 million to $18.21 billion.
Reserve position in the IMF increased by $19 million to $4.82 billion.
It can be noted that in October 2021, the country’s forex kitty had reached an all-time high of USD 645 billion. The reserves have been declining as the central bank deploys the kitty to defend the rupee amid pressures caused majorly by global developments.
Typically, the RBI, from time to time, intervenes in the market through liquidity management, including through the selling of dollars, with a view to preventing a steep depreciation in the rupee.
The RBI closely monitors the foreign exchange markets and intervenes only to maintain orderly market conditions by containing excessive volatility in the exchange rate, without reference to any pre-determined target level or band.