Mumbai, Feb 28: India's foreign exchange (forex) reserves saw a significant rise, increasing by $4.758 billion to reach $640.479 billion for the week ending February 21, according to data released by the Reserve Bank of India (RBI) on Friday.
This marks a reversal from the previous week’s decline when reserves had dropped by $2.54 billion, bringing the total to $635.721 billion. Over the past several weeks, the forex reserves had been on a downward trajectory due to revaluation adjustments and RBI’s market interventions aimed at stabilizing rupee volatility.
Breakdown of Forex Reserves Components
- Foreign Currency Assets (FCAs):
- A major component of forex reserves, FCAs rose by $4.251 billion to $543.843 billion.
- These assets are measured in dollar terms and account for the fluctuations in non-US currencies like the euro, pound, and yen.
- Gold Reserves:
- The country's gold holdings increased by $426 million, reaching $74.576 billion.
- Special Drawing Rights (SDRs):
- SDRs, the international reserve assets allocated by the International Monetary Fund (IMF), rose by $73 million, bringing the total to $17.971 billion.
- India’s IMF Reserve Position:
- The reserve position with the IMF climbed by $7 million to $4.09 billion.
All-Time High Reserves and Market Trends
India’s forex reserves had previously touched a record high of $704.885 billion in September 2024. However, recent weeks have seen fluctuations as the central bank intervened in the foreign exchange market to curb excessive volatility in the rupee.The increase in reserves this week suggests a stronger external balance position, potentially providing greater economic stability amid global financial uncertainties.
