Reserve Bank of India (RBI) on Friday reported that India’s forex reserves rose by $1.727 billion to $573.727 billion in the week ending January 20. This is the secondconsecutive week that reserves have increased. In the preceding week, India’s forex reserves jumped by $10.417 billion to $572 billion.
In October 2021, the country's foreign exchange reserves reached an all-time high of $645 billion. However, the reserves have been declining since RBI deployed the kitty to defend the rupee amid pressures caused by global developments.
Foreign exchange reserves are kept in the form of a multi-currency portfolio that includes major currencies like the US dollar, Euro, Pound sterling, and Japanese yen, among others, but are evaluated in US dollars. When the dollar strengthens, the value of foreign currencies relative to the US currency falls, resulting in a nominal fall in the overall reserves position.
Also Read: Stock Market Crash: Sensex Plunges 1,000 Points On Friday. Here Are The Key Reasons
According to the Weekly Statistical Supplement released by the RBI on Friday, foreign currency assetsv(FCA), a major component of the reserves, increased by $839 million to $506.358 billion in the reporting week.
Foreign currency assets (FCA) include the effect of appreciation or depreciation of non-US units like the euro, pound, and yen held in the foreign exchange reserves.
The data also showed that the gold reserves continued to rise, jumping by $821 million to $43.712 billion. The Special Drawing Rights (SDRs) were up by $68 million to $18.432 billion. The country's reserve position with the IMF was down by $1 million to $5.226 billion in the reporting week, the central bank's data showed.
According to a Reuters report, the rupee has strengthened against the dollar by 0.3 per cent in the week ending January 20, marking the second straight weekly increase. It has been trading between 81.0675 and 81.8925.