Forex reserves surge to $636.095 billion

NEW DELHI: Foreign exchange reserves surged by $10.470 billion to reach $636.095 billion by the end of the week ending on March 8, according to the latest data released by the Reserve Bank of India (RBI).
This marks the third consecutive week of growth to hit a two-year high.. The data prior to the week ending on March 8 indicated a rise of $6.554 billion, bringing the total reserves to $625.626 billion.
RBI’s weekly statistical data revealed that India’s foreign currency assets (FCA), the largest component of the forex reserves, surged by $8.21 billion to $562.352 billion during the latest week.
However, gold reserves declined by $2.299 billion, settling at $50.716 billion.
In 2023, the RBI bolstered the foreign exchange reserves by about $58 billion, following a cumulative slump of $71 billion in 2022.
Foreign exchange reserves, also known as FX reserves, are assets held by a country’s central bank or monetary authority, primarily in reserve currencies such as the US Dollar, Euro, Japanese Yen, and Pound Sterling.
Despite reaching an all-time high of around $645 billion in October 2021, a slight decline has been observed, partly due to increased import costs in 2022.
The decrease in reserves could also be attributed to the RBI’s interventions in the market to stabilize the rupee against a strong US dollar.
The RBI intervenes through liquidity management, including dollar sales, to prevent sharp rupee depreciation and maintain market stability without specific target levels.

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