Forex Update: India’s Foreign Exchange Reserves Jump $2.9 Billion to $619 Billion

India’s forex reserves jumped $2.975 billion to $619.072 billion for the week ended February 23, according to the latest RBI data. In the previous reporting week, the overall reserves had dropped $1.132 billion to $616.097 billion.

For the week ending February 23, the foreign currency assets, a major component of the reserves, increased by $2.405 billion to $548.188 billion. 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 by $472 million to $47.848 088 billion during the week, the RBI said. The special drawing rights (SDRs) were up by $89 million to $18.197 billion, the apex bank said.

India’s reserve position with the IMF was up by $9 million to $4.839 billion in the reporting week, the apex bank data showed. India’s forex reserves hit an all-time high of $645 billion in October 2021.

Rupee During Week Ended March 1

The rupee moved in range of 12 paisa in the week as inflows were managed by RBI by buying the dollars taking it from a high of 83.8325 to 83.9450 during the week. There were huge inflows in the form of FPI inflows as also MSCI rebalancing inflows. But RBI has been able to keep rupee well within a small range and in a tight leash.

Anil Kumar Bhansali, head of treasury and executive director of Finrex Treasury Advisors LLP, said “Next week will see more of inflows which will be absorbed by RBI and keep rupee in a tight range narrowly 82.85 to 82.95 and broadly 82.75 to 83.05. Exporters need to sell the good upticks while importers need to buy the dips for very near term.”