India’s forex reserves rise for seventh week, hit near 22-month high

MUMBAI: India’s foreign exchange reserves rose for a seventh straight week and stood at a near 22-month high of $623.20 billion as of Dec. 29, data from the central bank showed on Friday.

The reserves rose by $2.76 billion for the reported week after increasing by a total of $30.12 billion in the prior six weeks.

Changes in foreign currency assets are caused by the Reserve Bank of India’s (RBI) intervention as well as the appreciation or depreciation of foreign assets held in the reserves.

The RBI intervenes in the foreign exchange market to curb excess volatility in the rupee.

India’s forex reserves hit over 21-month high

The rupee is expected to trade in a tight range against the U.S. dollar this year as the RBI continues to intervene to manage the exchange rate despite aggressive market bets for U.S. interest rate cuts, according to a Reuters poll of FX strategists.

Foreign exchange reserves also include India’s reserve tranche position in the International Monetary Fund.

For the reported week, the rupee traded in a narrow range of 83.0950 to 83.3500 against the dollar, and logged marginal weekly losses.

The domestic currency settled at 83.15 on Friday, little changed for this week.

FOREIGN EXCHANGE RESERVES (in million U.S. dollars)
----------------------------------------------------
                              Dec 29       Dec 22
                               2023         2023
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Foreign currency assets      551,615      549,747
Gold                          48,328       47,474
SDRs                          18,365       18,327
Reserve Tranche Position       4,892        4,894
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Total                        623,200      620,441
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