India’s foreign exchange reserves rose sharply by USD 5.977 billion to USD 578.778 billion, hitting an over eight-month high.
During the prior week that ended on March 17, they rose by USD 12.798 billion to USD 572.801 billion, according to the Reserve Bank of India data.
According to RBI’s latest data, India’s foreign currency assets, the biggest component of the forex reserves, rose by USD 4.38 billion to USD 509.728 billion.
Gold reserves during the latest week rose by USD 1.370 billion to USD 45.480 billion. At the start of the last year 2022, the overall forex reserves were at about USD 633 billion. Much of the decline can be attributed to RBI’s recent intervention and a rise in the cost of imported goods.In October 2021, the country’s foreign exchange reserves touched an all-time high of about USD 645 billion.
Earlier, the forex reserves had been intermittently falling for months largely because of the RBI’s intervention in the market to defend the depreciating rupee against a surging US dollar. Typically, the RBI, from time to time, intervenes in the market through liquidity management, including through the selling of dollars, with a view to preventing a steep depreciation in the rupee.
The RBI closely monitors the foreign exchange markets and intervenes only to maintain orderly market conditions by containing excessive volatility in the exchange rate, without reference to any pre-determined target level or band.