India’s Forex Reserves Jump $7.26 Billion To $674.19 Billion As RBI Absorbs Dollar Inflows
India’s foreign exchange reserves grew by $7.26 billion during the week ended 3 July, taking the total to $674.19 billion, aided by gains in both foreign currency assets and gold holdings, the Reserve Bank of India reported on Friday (10 July).
Foreign currency assets, which make up the bulk of the reserves, climbed $4.51 billion to $545.58 billion over the week. When measured in dollars, these assets capture how movements in non-US currencies held within the kitty, including the euro, pound and yen, affect the overall figure through appreciation or depreciation.
State Bank of India noted in a report, “RBI foreign currency reserves increased by $4.4 billion during the fortnight, indicating the desire of the RBI to also recoup foreign exchange reserves.”
Explaining the trend, a dealer at a state-owned bank said, “The RBI has been absorbing dollar flows, which has helped replenish reserves. There have been inflows, but the central bank has been taking a significant share of those dollars.”
Gold reserves added $2.67 billion to reach $105.21 billion for the week. Special Drawing Rights went up by $65 million to $18.62 billion, and the country’s reserve position with the International Monetary Fund advanced $15 million to $4.79 billion, as per the central bank’s data.
In the preceding week, the reserves had slipped $5.65 billion to $666.93 billion. The stockpile had scaled a peak of $728.49 billion in the week ended February 27 before easing, as the RBI periodically offloaded dollars to temper sharp swings in the rupee.
The central bank returned to buying dollars in June on the back of steady inflows, supporting the rebuild.
The rupee, meanwhile, closed almost flat on Friday at 95.33 per dollar against 95.38 earlier, though it shed roughly 0.1 per cent over the week amid West Asia tensions.
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