India's Forex Reserves Snap Two-Week Fall, Rise $5.9 Billion To $595 Billion: RBI

The forex reserves have been declining as the RBI deploys the kitty to defend the rupee amid pressures caused majorly by global developments

Snapping decline for  two consecutive weeks, India's foreign reserves (forex) kitty jumped $5.929 billion to $595.067 billion for the week ended June 2, the Reserve Bank of India (RBI) said on Friday. The reserves had declined by $4.34 billion to $589.14 billion in the previous reporting week. It can be noted that in October 2021, the country's forex kitty had reached an all-time high of $645 billion. The reserves have been declining as the central bank deploys the kitty to defend the rupee amid pressures caused majorly by global developments.

For the week ended June 2, the foreign currency assets, a major component of the reserves, increased by $5.27 billion to $526.201 billion, according to the Weekly Statistical Supplement released by the RBI on Friday.

Expressed in dollar terms, the foreign currency assets include the effect of appreciation or depreciation of non-US units like the euro, pound and yen held in the foreign exchange reserves.

Gold reserves jumped by $655 million to $45.557 billion, the RBI said. The Special Drawing Rights (SDRs) were down by $6 million to $18.186 billion, the apex bank said. India's reserve position with the IMF was up $10 million to $5.123 billion in the reporting week, the central bank data showed. 

On Thursday, RBI Governor Shaktikanta Das said the Indian economy stand strong and resilient and forex reserves are at comfortable levels. "Indian rupee has remained stable since January 2023. Foreign exchange reserves stood at $595.1 billion as on June 2," the governor noted.

The central bank's Monetary Policy Committee (MPC) on Thursday announced to keep policy rate unchanged at 6.5 per cent. This was second time in a row that the RBI opted for a pause in rate hike. The RBI has retained growth projection at 6.5 per cent for FY24, expects 8 per cent growth in Q1, 6.5 per cent in Q2, 6 per cent in Q3, while 5.7 per cent in Q4. "Domestic demand condition remains supportive of growth, while rural demand on revival path," he said.