Forex Reserves Rise $6.30 Billion To $584.75 Billion, At 9-Month High

India's foreign exchange reserves rose by $6.3 billion to $584.75 billion in the week ended April 7, the highest in the past nine months, the RBI statistical supplement showed on Friday.

In the last reporting week, forex reserves declined by $329 million to $578.45 billion. ( Image Source :Getty )

India's foreign exchange (Forex) reserves rose by $6.3 billion to $584.75 billion in the week ended April 7, the highest during the past nine months, the Reserve Bank of India's (RBI) statistical supplement showed on Friday. In the last reporting week, forex reserves declined by $329 million to $578.45 billion. The rise in reserves in the reporting week is mainly on account of an increase in foreign currency assets, which was up $4.74 billion to $514.4 billion. Foreign Currency Assets (FCAs) are held in diverse currencies like the US dollar, Euro, pound sterling, Australian dollar, etc. An appreciation in the value of the US dollar against major international currencies translates into a lower US dollar equivalent for assets held in other currencies. 

RBI's data showed that Gold reserves rose by $1.496 billion to $46.696 billion in the reporting week. The Special Drawing Rights (SDRs) were up by $58 million to $18.45 billion and the country's reserve position with the IMF was up by $13 million to $5.178 billion.

 

 

The country's reserves of foreign currency hit an all-time high of $645 billion in October 2021. The reserves have been decreasing as the central bank has utilised its funds to support the rupee against pressure from international events. 

 

Forex reserves are essential assets maintained in foreign currencies by the central bank. They frequently support the exchange rate and have an impact on monetary policy. The RBI intervenes in the spot and forwards markets to stop the rupee from making unpredictable movements that have an impact on the overall reserves position. Forex changes also occur from valuation gains or losses. 

 

 

While announcing RBI's monetary policy decision on April 6, Governor Shaktikanta Das said that a comfortable level of foreign exchange reserves will further bolster macroeconomic stability. The rupee moved in an orderly manner in 2022 and continues to do so in 2023. 

The rupee closed at 81.85 against the dollar on Thursday and clocked its fourth consecutive weekly rise for the holiday-shortened week ending April 14.