New Delhi, Sep 12: India’s foreign exchange reserves increased by $4.03 billion to touch $698.26 billion for the week ending September 5, according to data released by the Reserve Bank of India (RBI) on Friday.
This comes after reserves had already risen by $3.51 billion in the previous week, taking the total to $694.2 billion as of August 29.
Foreign Currency Assets Increase
The RBI data showed that foreign currency assets (FCAs), the largest part of the reserves, went up by $540 million to $584.47 billion. These assets include currencies such as the euro, pound and yen, and their value in dollar terms also reflects changes in exchange rates.
Gold Reserves Provide Big Boost
A big boost came from gold reserves, which jumped by $3.53 billion to reach $90.29 billion during the week. On the other hand, special drawing rights (SDRs) stood at $18.74 billion, as per the central bank’s data. India’s reserve position with the International Monetary Fund (IMF) also inched up by $2 million to $4.75 billion.
RBI’s Role in Market Stability
The RBI frequently steps into the forex market to control sudden fluctuations in the rupee. Such interventions, officials say, are not meant to fix the currency at a particular level but to ensure stability and prevent sharp volatility.
Analysts See Strong Economic Cushion
With reserves inching closer to the $700 billion mark, analysts believe the strong buffer will help India manage external shocks and provide confidence to global investors in uncertain times.
Previous Week’s Growth
Meanwhile, foreign currency assets, a major component of the reserves, for the week ended August 29, was increased by $1.69 billion to $583.94 billion.
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Expressed in dollar terms, the foreign currency assets include the effect of appreciation or depreciation of non-US units like the euro, pound, and yen held in the foreign exchange reserves. For the week ended August 29, the gold component of the forex reserves was also increased by $1.77 billion to $86.77 billion.
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