India’s foreign exchange reserves rise for sixth week to record high

MUMBAI: India’s foreign exchange reserves rose for a sixth straight week to hit a lifetime high of $645.58 billion as of Mar. 29, data from the central bank showed on Friday.

The reserves rose by $2.95 billion in the reporting week, after having risen by a total of $26.5 billion in the previous five weeks.

The Reserve Bank of India (RBI) intervenes in the foreign exchange market to curb excess volatility in the rupee.

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

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

India’s forex reserves jump to record high

Despite India’s strong growth and inflows into equity and debt markets, the central bank has been absorbing inflows to build reserves.

“It is our prime focus to build a strong umbrella, a strong buffer in the form of a substantial quantum of forex reserves which will help us when the cycle turns or when it rains heavily,” RBI Governor Shaktikanta Das said on Friday.

In the week that the foreign exchange data pertains, the rupee had hit a record low of 83.45 against the dollar, but clocked minor weekly gains.

The domestic currency settled at 83.2950 on Friday, up 0.1% this week.

FOREIGN EXCHANGE RESERVES (in million U.S. dollars)
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                            March 29     March 22
                               2024         2024
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Foreign currency assets      570,618      568,264
Gold                          52,160       51,487
SDRs                          18,145       18,219
Reserve Tranche Position       4,660        4,662
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Total                        645,583      642,631
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