India’s forex reserves rose by $6.596 billion to $665.396 billion during the week ended March 28, according to data released by the Reserve Bank of India (RBI) on Friday. This marks the fourth consecutive week of increase in the country’s foreign exchange reserves.
In the previous week, the reserves had increased by $4.53 billion. The recent rise in the reserves was attributed to RBI’s intervention in the foreign exchange market to curb fluctuations in the rupee and changes in valuations.
Foreign Currency Assets also Witnessed an Increase
India’s forex reserves had reached an all-time high of $704.88 billion by the end of September 2024. According to data released on Friday, foreign currency assets—a key component of the foreign exchange reserves—rose by $6.16 billion to $565.01 billion during the week ended March 28.
These foreign currency assets, expressed in terms of US dollars, also reflect the impact of fluctuations in non-US currencies such as the euro, pound and yen held in the reserves.
India’s Gold Reserves Also Rise
The country’s gold reserves saw an increase during the same period. The Reserve Bank of India (RBI) said that the gold reserves rose by $519 million to $77.79 billion. However, the Special Drawing Rights (SDR) fell by $65 million to $18.18 billion.
According to the data, India’s reserve position with the International Monetary Fund (IMF) also fell by $16 million to $4.41 billion. It is worth noting that during this period, the foreign exchange reserves of neighboring country Pakistan also saw an increase.
Why Are Forex Reserves Important?
The foreign exchange reserves of a country are used to meet global liabilities, implement monetary policy, repay foreign debt, and cover expenses incurred by Indians for education, medical treatment, or travel abroad.
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