India’s foreign exchange reserves rose by USD 10.87 billion to USD 676.26 billion in the week ending 4 April, according to data released by the Reserve Bank of India (RBI) on Friday. This marks the fifth consecutive weekly increase in the country’s forex holdings.
The rise comes after a volatile period, where reserves had dipped to an 11-month low following a four-month slump. Before the recent recovery, India’s forex reserves had touched an all-time high of USD 704.89 billion in September 2023.
The RBI is widely believed to have intervened in the currency markets in recent months to stabilise the Rupee, which is currently hovering around its all-time low against the US Dollar. Interventions typically involve selling dollars to arrest sharp depreciation in the Rupee or purchasing them when the domestic currency strengthens.
According to the central bank’s latest data, India’s foreign currency assets (FCA) — the largest component of the overall reserves — stood at USD 574.08 billion, while gold reserves totalled USD 79.36 billion.
The country’s reserves are now sufficient to cover approximately 10 to 11 months of projected imports, estimates suggest.
In 2023, India added USD 58 billion to its forex reserves, reversing the previous year’s decline of USD 71 billion. In 2024 so far, the reserves have grown by a little over USD 20 billion.
Forex reserves, also referred to as foreign exchange reserves, comprise assets such as foreign currencies, gold, and Special Drawing Rights (SDRs), held by a country’s central bank or monetary authority. These are primarily held in reserve currencies like the US Dollar, along with smaller portions in the Euro, Pound Sterling, and Japanese Yen.
The RBI frequently manages liquidity and exchange rate volatility by strategically buying or selling foreign currencies in the market.
Follow us
