India’s foreign exchange reserves continued their upward momentum, rising by USD 6.596 billion to USD 665.396 billion as of March 28 — the highest weekly gain in nearly five months, as per RBI data.

This substantial increase is the highest in nearly five months, following a period of decline.  

According to RBI data, forex reserves have cumulatively increased by USD 20.1 billion over the past three weeks, with about USD 6.6 billion added in the latest reporting week. Experts attribute the earlier declines to shaken investor confidence in Indian equity markets.  

As of March 28, the data shows that gold reserves stood at USD 77.793 billion, while foreign currency assets were valued at USD 565.014 billion.  

During the same period, the Indian Rupee appreciated by 0.6 per cent against the US Dollar. This appreciation is seen as a sign of renewed foreign investment confidence in the Indian stock markets.  

Any decline in reserves is typically due to RBI interventions aimed at preventing sharp depreciation of the Rupee.  

Official estimates suggest that India’s current forex reserves are sufficient to cover approximately 10 to 11 months of projected imports.  

In 2023, India added around USD 58 billion to its foreign exchange reserves, compared to a cumulative decline of USD 71 billion in 2022. In 2024, the reserves increased by a little over USD 20 billion.  

Foreign exchange reserves, or FX reserves, are assets held by a nation’s central bank or monetary authority. These are primarily held in reserve currencies such as the US Dollar, with smaller portions in the Euro, Japanese Yen, and Pound Sterling.  

The RBI often intervenes in the currency market by managing liquidity—selling dollars to curb a weakening Rupee and buying dollars when the Rupee strengthens.  

(ANI)