India’s Forex Reserves Rise by $1.5 Billion to $677.8 Billion for Sixth Consecutive Week: RBI – Firstpost

On Friday, the Reserve Bank of India (RBI) said that the country’s
forex reserves increased by $1.5 billion to $677.8 billion for the week ended April 11.

This is the sixth consecutive week the Indian forex has seen a jump. The overall reserves jumped by $10.8 billion to $676.2 billion in the previous reporting week ended April 4.

It is pertinent to note that the forex reserves reached an all-time high of $704.9 billion in September. Meanwhile, Gold reserves surged by $638 million to $79.997 billion, PTI reported.

The data released by the RBI showed that for the week ended April 11, foreign currency assets, a major component of reserves, rose by USD 892 million to USD 574.98 billion.

The foreign currency assets include the effect of appreciation or depreciation of non-US units like the euro, pound and yen held in the foreign exchange reserves.

The apex bank noted that the Special Drawing Rights (SDRs) were down USD 6 million at USD 18.356 billion. India’s reserve position with the IMF was also up by 43 million at USD 4.502 billion in the reporting week.

The declining trend for earlier weeks was due to revaluation and forex market interventions by the RBI to help reduce volatility in the rupee. The central bank said these declines have reversed in the last six weeks.

It is pertinent to note that an increase in the foreign exchange reserve also helps in bolstering the rupee vis-a-vis the US dollar and is good for the economy. Hence, the recent increase of foreign exchange reserve has made the rupee stronger.

A strong forex reserve enables the RBI to intervene in the spot and forward currency markets by releasing more dollars to prevent the rupee from going into a free fall.

The figure reflects the strengthening of the external sector of the economy despite geopolitical tensions that have triggered economic uncertainty and instability in the world market.

With inputs from agencies.