Forex Update: India’s Foreign Exchange Reserves Hit All-Time High of $648.7 Billion, Jump $4.5 Billion

In the third consecutive weekly increase, India’s foreign exchange (forex) reserves jumped $4.549 billion to a new all-time high of $648.7 billion for the week ended May 17, according to the latest RBI data. The overall forex reserves had increased $2.561 billion to $644.151 billion in the previous reporting week ended May 17.

For the week ended April 5, the reserves had hit an all time high of $648.562 billion following multiple weeks of increases.

In the week ended May 10, foreign currency assets — a major component of the reserves — increased $3.361 billion to $569.009 billion, the RBI data released on Friday showed.

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.

Gold reserves increased $1.244 billion to $57.195 billion during the week. The special drawing rights (SDRs) were up $113 million to $18.168 billion, the RBI said.

India’s reserve position with the IMF was down $168 million to $4.327 billion in the reporting week, the apex bank data showed.

Sanjeev Agrawal, president of PHD Chamber of Commerce and Industry, said, “It is highly appreciable that despite global headwinds, India’s forex reserves are at all-time high levels, on the back of strategic policy reforms and vigil monetary policy. The strengthened foreign reserves, at the level of $648 billion, will propel India’s growth to new highs, bolstering its global standing further.”

India’s robust foreign exchange reserves will offer the Reserve Bank greater autonomy in managing the country’s currency in light of the geopolitical challenges and fluctuations in global commodity prices, he added.

Amit Goel, co-founder and chief global strategist at Pace 360, said, “Foreign exchange holdings increased by $4.55 billion, primarily due to the upward revaluation of gold and foreign currency assets.”

Meanwhile, in March, the Reserve Bank of India (RBI) bought a net $13.25 billion in the spot foreign exchange market in March, according to the central bank’s monthly bulletin released earlier this week.

The RBI said it purchased $14.84 billion and sold $1.59 billion during the month. In the previous month, it had bought a net $8.56 billion in the spot market. The Indian rupee weakened by 0.6 per cent against the dollar in March, and had traded in a range of 82.64 to 83.45.