NEW DELHI, India — India’s foreign exchange reserves rose by $392 million to $687 billion in the week ended January 9, according to data released by the Reserve Bank of India on Friday.
The central bank said the value of gold reserves, a key component of the country’s forex holdings, increased by $1.56 billion to $112.83 billion during the week. The rise was attributed largely to higher global gold prices, which climbed about 2.5 percent over the past week and roughly 5.5 percent over the past month.
In contrast, foreign currency assets, the largest component of the reserves, declined by $1.12 billion to $550.86 billion. Foreign currency assets include holdings in major global currencies such as the U.S. dollar, euro, yen, and pound, with their values expressed in dollar terms.
The RBI also reported that the value of Special Drawing Rights fell by $39 million to $18.73 billion, while India’s reserve position with the International Monetary Fund declined by $13 million to $4.758 billion during the same period.
Foreign exchange reserves are widely seen as an important indicator of a country’s economic strength and play a critical role in maintaining currency stability. The RBI can draw on these reserves to curb excessive volatility in the rupee, particularly during periods of pressure against the U.S. dollar.
Rising reserves also signal stronger inflows of foreign currency into the economy and support the country’s ability to finance imports and conduct international trade more smoothly. (Source: IANS)
