India's Forex Reserves surge for 8th week, Nearing $688 Billion
India's foreign exchange reserves have surged for the eighth consecutive week, nearing $688 billion, according to RBI data. Despite this growth, the reserves remain below the all-time high of $704.885 billion achieved last September. The increase is largely due to a rise in foreign currency assets, while gold reserves saw a decline.
Mumbai (Maharashtra) [India], May 4 (ANI): India's foreign exchange reserves (Forex) rose by USD 1.983 billion to USD 688.129 billion in the week that ended on April 25, extending gains for the eighth straight week, official data released by the Reserve Bank of India (RBI) this week showed.
Despite eight consecutive rises in the Forex the reserve remained below the all time high of USD 704.885 billion which was achieved in the last September previous year.
The RBI data shows that foreign currency assets (FCAs) witnessed an uptick of USD 2.168 billion reaching at USD 580.663 billion.
The FCAs are the largest components of the foreign exchange reserves which reflects the valuation impact of non-US currencies like euro, pound, and yen kept in the reserves. They are written in the dollar terms.
In the reported week, the gold reserves with the RBI declined by USD 207 million, standing at USD 84.365 billion. The Special Drawing Rights (SDRs), which are kept with the International Monetary Fund (IMF), witnessed a rise reaching USD 18.589 billion, up USD 21 million in the reporting week.
India's foreign exchange reserves rose USD 8.310 billion to USD 686.145 billion in the week that ended on April 18.
The forex reserves started falling after reaching an all-time high of USD 704.89 billion in September, only to recover afterwards. The decline in reserves was most likely due to RBI intervention, aimed at preventing a sharp depreciation of the Rupee. The Indian Rupee is now at or near its all-time low against the US dollar.
An estimate by the apex bank suggests that India's foreign exchange reserves are sufficient to cover approximately 10-12 months of projected imports.
In 2023, India added around USD 58 billion to its foreign exchange reserves, contrasting with a cumulative decline of USD 71 billion in 2022.In 2024, the reserves rose by a little over USD 20 billion.
Foreign exchange reserves, or FX reserves, are assets held by a nation's central bank or monetary authority, primarily in reserve currencies such as the US Dollar, with smaller portions in the Euro, Japanese Yen, and Pound Sterling.
The RBI often intervenes by managing liquidity, including selling dollars, to prevent steep Rupee depreciation. The Central bank strategically buys dollars when the Rupee is strong and sells when it weakens. (ANI)