Forex kitty rises for 7th week to hit record high – Economy News

Foreign exchange reserves rose for the seventh straight week to hit a record high of $648.6 billion in the week ended April 5, data from the Reserve Bank of India(RBI) showed on Friday.

The reserves rose by nearly $3 billion in the reporting week, after rising $29.45 billion in the previous six weeks. The RBI intervenes in the foreign exchange market to curb excess volatility in the rupee.

Changes in foreign currency assets are caused by the RBI’s intervention as well as the appreciation or depreciation of foreign assets held in reserves.

Foreign currency assets rose $549 million to $571.2 billion. Gold reserves rose $2.4 billion to $54.6 billion.

Special drawing rights rose $24 million to $18.2 billion. Reserve position in the International Monetary Fund rose $9 million to $4.7 billion.

The rupee gained 11 paise or 0.13% to 83.29 in the week ended April 5 after RBI governor Shaktikanta Das said that the central bank is consciously building foreign exchange reserves in accordance with prevailing market conditions.

“The dollar index rose to 105.35$, leading to weakness in all currencies, including the rupee. Despite this, the strength of the Indian economy is expected to support the rupee,” Jateen Trivedi, VP Research Analyst – Commodity and Currency, LKP Securities said.

“As a result, the rupee is likely to experience sideways movement with increased volatility, maintaining a range between 83.15-83.55,” he added.