New Delhi: India’s foreign exchange reserves rose sharply by USD 5.977 billion to USD 578.778 billion, reaching an eight-month high. During the week ended March 17, they rose by USD 12.798 billion to USD 572.801 billion, according to data from the Reserve Bank of India.
India’s foreign currency assets, the largest component of foreign exchange reserves, rose by USD 4.38 billion to USD 509.728 billion, according to the latest data from the Reserve Bank of India. ,ALSO READ: India’s unemployment rate hits three-month high of 7.8% in March: CMIE,
During the latest week the gold reserves increased by US$ 1.370 billion to US$ 45.480 billion. Last year at the beginning of 2022, the total foreign exchange reserves stood at around USD 633 billion. ,ALSO READ: White House denies paying for Twitter’s Blue Verification: Report,
Much of the decline can be attributed to the recent RBI intervention and increase in the cost of imported goods. In October 2021, the country’s foreign exchange reserves touched an all-time high of around USD 645 billion.
Earlier, forex reserves had been falling intermittently for months as the Reserve Bank of India’s intervention in the market hedged the rupee’s fall against the rising US dollar.
Generally, the Reserve Bank of India intervenes from time to time in the market through liquidity management, which includes selling of dollars, with a view to prevent heavy depreciation in the rupee.
The RBI closely monitors the foreign exchange markets and intervenes only to maintain orderly conditions in the market by controlling excessive volatility in exchange rates, without reference to any pre-determined target level or band.