MUMBAI: India’s foreign exchange reserves rose for a third straight week to more than a one-month high of $638.26 billion as of February 7, data released by the central bank on Friday showed.
The reserves increased by $7.66 billion in the reported week, the highest jump since the week ended September 27, when they touched a record high. The reserves had risen by a total of $6.6 billion in the prior two weeks.
Last week’s jump in reserves was mainly due to a revaluation gain of $8.2 billion, said Gaura Sen Gupta, India economist at IDFC FIRST Bank.
The Reserve Bank of India conducted a $5 billion buy-sell swap auction on January 31 to infuse rupee liquidity into the banking system, the settlement for which took place on February 4.
However, the RBI’s continued dollar selling in the spot market to limit the rupee’s decline during the week offset the accretion to reserves from the buy-sell swap, Sen Gupta said.
“We expect more buy-sell swaps to be announced to replenish FX reserves and extend the maturity of the RBI forward book,” she added.
India’s FX reserves halt 7-week losing spree as rupee pressure eases
The rupee has been volatile over the last few weeks as global markets were jolted by fears of a trade war and foreign portfolio outflows persisted.
The domestic unit declined by nearly 1% in the week through February 7, its worst weekly performance since December 2022.
The unit ended at 86.8225 against the dollar on Friday and rose 0.7% on the week, the most since mid-July 2023.
Changes in foreign currency assets are caused by the central bank’s intervention in the forex market as well as the appreciation or depreciation of foreign assets held in the reserves.
Foreign exchange reserves (in million US dollars)
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Feb 07 Jan 31
2025 2025
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Foreign currency assets 544,106 537,684
Gold 72,208 70,893
SDRs 17,878 17,889
Reserve Tranche Position 4,069 4,141
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Total 638,261 630,607
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