India's foreign exchange reserves have reached a three-month high, increasing by $305 million to stand at $654.27 billion for the week ending March 14, 2025.
This rise follows a $10 billion forex swap conducted by the Reserve Bank of India (RBI).
The latest increase comes after a substantial rise of $15.27 billion in the previous week, marking the sharpest weekly gain in two years and the most significant jump since August 2021.
The recent boost in India's forex reserves has brought some optimism amidst the backdrop of a declining trend. This decline was primarily due to currency revaluation and the RBI's interventions in the forex market to stabilise the rupee.
India's forex reserves had reached an all-time high of $704.89 billion in September 2021 but had been on a downward trajectory since then.
Foreign currency assets (FCA), the largest component of the reserves, fell by $96 million to $557.19 billion. The FCA accounts for the central bank's forex market interventions and the fluctuations in the value of non-US currencies like the euro, pound, and yen held in the reserves.
Additionally, India's Special Drawing Rights (SDRs) with the International Monetary Fund (IMF) increased by $51 million, bringing the total to $18.26 billion.
The country's reserve position at the IMF also saw an increase of $283 million, reaching $4.43 billion. Gold reserves, another significant part of India's forex reserves, rose by $66 million to $74.39 billion.
The rupee has experienced volatility amid a global economic environment marked by uncertainties, especially due to changing US tariff policies.
Despite these challenges, the RBI has taken steps to stabilise the currency by selling dollars in the spot market and conducting dollar-rupee buy-sell swaps to maintain liquidity in the banking system.
The rupee ended at 85.97 against the US dollar, showing a marginal depreciation of 0.1% for the week. However, it had touched a 10-week high of 85.94 during the session, recording a 1.2% gain over the week.
Follow us
