As per latest Reserve Bank of India (RBI) data, India’s foreign exchange reserves have hit an all-time high of 642.292 billion US dollars.
India’s foreign exchange reserves have hit an all-time high of 642.292 billion US dollars by the end of the week ending March 15, according to latest data released by the Reserve Bank of India (RBI), adding that the forex reserves continued to rise for the fourth straight week.
According to the RBI data, India’s foreign exchange rose by 6.396 billion dollars during the past week, while the forex kitty surged by $10.470 billion in the week before.
“India’s foreign currency assets (FCA), the biggest component of the forex reserves, rose by USD 6.034 billion to USD 568.386 billion,” the RBI’s data showed.
The data also showed that India’s gold reserves also surged during the week, from USD 425 million to USD 51.140 billion.
Notably, India added around $58 billion in foreign exchange during the calendar year 2023 in contrast to the previous year when forex reserves had slumped by $71 billion cumulatively, the RBI data showed.
In October 2021, the India’s foreign exchange reserves last touched their all-time high. Much of the decline after that could be attributed to a rise in the cost of imported goods in 2022.
The relative decline in forex reserves could be also linked to the RBI’s intervention, from time to time, in the market to defend the uneven depreciation in the rupee against a surging US dollar. The central bank intervenes in the market through liquidity management, including through the sale of dollars, to prevent a steep depreciation in the rupee.
The foreign exchange markets are closely monitored by the RBI and the bank only intervenes to maintain orderly market conditions by containing excessive volatility in the exchange rate, without reference to any predetermined target level or band.
Forex reserves, or foreign exchange reserves (FX reserves), are assets that are held by a nation’s central bank or monetary authority. It is generally held in reserve currencies, usually the US Dollar and, to a lesser degree, the Euro, Japanese Yen, and Pound Sterling.
(With ANI inputs)