Updated April 12th, 2024 at 19:30 IST

India’s forex reserve touches Rs 648.56 billion to reach record high

While the reserves were used  by the central bank to stabilise the rupee amidst global pressures, there has been consistent accumulation over recent months.

Reported by: Business Desk
Forex reserves | Image:Freepik
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Forex reserves at record high: India’s foreign exchange reserves (forex) surged by $2.98 billion to reach $648.562 billion for the week ending April 5, according to data released by the Reserve Bank of India (RBI) on Friday, April 12. This marks the seventh consecutive week of an increase in overall reserves. In the previous reporting period, the forex reserves had risen by $2.951 billion to a record high of $645.583 billion.

In September 2021, India's forex reserves hit an all-time peak of $642.453 billion, a milestone surpassed in March this year. While the reserves were used  by the central bank to stabilise the rupee amidst global pressures, there has been consistent accumulation over recent months.

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During the week ended April 5, foreign currency assets (FCA), a key component of the reserves, grew by $549 million to $571.166 billion, as per the released data. The FCA, denominated in dollar terms, encompass the impact of exchange rate movements of non-US currencies like the euro, pound, and yen held in the forex reserves.

Fluctuations in FCA are influenced by RBI interventions and movements in foreign assets held in the reserves. The RBI intervenes in the forex market to mitigate excessive volatility in the rupee.

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Gold reserves also saw an increase, rising by $2.398 billion to $54.558 billion during the week, as reported by the RBI. Additionally, Special Drawing Rights (SDRs) rose by $24 million to $18.17 billion. India's reserve tranche position with the International Monetary Fund (IMF) also rose by $9 million to $4.669 billion in the reported week, according to RBI data.

The rupee depreciated by 13 paise to close at 83.44 against the US dollar on Friday, influenced by significant sell-offs in domestic equities and a strengthening greenback against major currencies worldwide. As observed by forex traders, elevated crude oil prices also impacted investor sentiment. In interbank foreign exchange trading, the rupee opened at 83.36, touching an intraday low of 83.44 against the US dollar, before settling at 83.44, registering a decline of 13 paise from its previous close.

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Published April 12th, 2024 at 19:30 IST