India's forex reserves rise for 2nd straight week as Rupee stands firm against dollar

As the banking crisis shook up the US federal reserve's fight against inflation, the US dollar weakened in the face of headwinds. With less pressure to maintain the Rupee's strength against the global currency, the Reserve Bank of India was able to shore up its foreign reserves.

For the week following the banking crisis, ending on March 24, 2023, the forex reserves for India climbed up by $5.98 billion, to hit $578.8 billion.

Consistent climb for foreign assets

This is the second straight rise for foreign reserves, after they had dropped in the week ending on March 10.

In the previous week, they had hit the highest levels since February, although they are still far from all-time highs of $642 billion.

Foreign currency continued to dominate foreign reserves and gained $4.38 billion to reach $509.72 billion.

Gold continues to shine as a safe bet

Gold as a hedge against global headwinds remained attractive for the central bank, which added the yellow metal worth $1.37 billion to its coffers.

This addition took gold reserves for India to $45.48 billion towards the end of the financial year.

The Rupee gained strength against the US dollar by rising 0.67% after a losing to the global currency for five quarters.

At the same time, it dropped 7.8 per cent against the dollar in FY23, which is its worst fall since 2020.