Mumbai–India’s foreign exchange reserves increased by $1.08 billion to $676.237 billion in the week ended July 17, extending their recent upward trend, according to data released by the Reserve Bank of India.
The increase followed a gain of $964 million in the previous reporting week, when the country’s reserves rose to $675.157 billion.
The RBI’s weekly statistical supplement showed that foreign exchange reserves continued to strengthen after recovering from declines earlier this year amid heightened global uncertainty.
India’s reserves had reached an all-time high of $728.494 billion in the week ended February 27.
Foreign currency assets, the largest component of the reserves, increased by $4.549 billion to $551.057 billion during the latest week.
When expressed in U.S. dollar terms, foreign currency assets reflect the impact of appreciation or depreciation in non-U.S. currencies held in the reserves, including the euro, pound and yen.
The value of India’s gold reserves fell by $3.48 billion to $101.749 billion, while Special Drawing Rights increased by $44 million to $18.67 billion, according to the RBI.
India’s reserve position had come under pressure in recent weeks as escalating tensions in the Middle East weighed on the rupee and prompted the central bank to intervene in the foreign exchange market through dollar sales.
Foreign exchange reserves include foreign currency assets, gold reserves, Special Drawing Rights and India’s reserve tranche position with the International Monetary Fund.
The reserves serve as a buffer against external shocks, help support the rupee and strengthen the country’s ability to meet international payment obligations and finance imports.
The RBI has maintained that it monitors developments in the foreign exchange market and intervenes to limit excessive volatility and maintain orderly market conditions rather than target a specific exchange rate. (Source: IANS)
