According to the latest data from the Reserve Bank of India, India’s foreign exchange reserves increased by US$5.736 billion to US$622.469 billion in the week ended February 2. Last week, overall reserves increased by $591 million to $616.733 billion.
In October 2021, the country’s foreign exchange reached a record high of $645 billion. Reserves have taken a hit as the central bank dipped into reserves to defend the rupee amid pressure from global developments since last year. Data from the Reserve Bank of India showed that foreign exchange assets, the main component of foreign exchange reserves, increased by $5.186 billion to $55.331 billion in the week ended February 2.
In U.S. dollar terms, foreign currency assets include the impact of appreciation or depreciation of non-U.S. units such as euros, pounds, and yen held in foreign exchange reserves.
Gold reserves increased by US$608 million this week to US$48.088 billion. The central bank said the Special Drawing Rights (SDR) fell by $58 million to $18.19 billion.
India’s reserve position with the International Monetary Fund remained unchanged at $4.86 billion this week.
rupee
Anil Kumar Bhansali, treasurer and executive director, Finrex Treasury Advisors LLP, said: “Significant inflows into the country during the week ended February 9 kept the dollar-rupee exchange rate low. levels, but the Indian rupee remains lower as the Reserve Bank of India buys dollars.” The pair is above 83.00. Today, oil is the main buyer and flows continue unabated, and just like stocks, despite the sell-off, there is enough buying in the debt space to ensure dollar inflows. “
He added that the rupee has fluctuated in the range of 82.82 to 83.07 this week and the RBI will not allow the rupee to fall below 82.80. The rupee is expected to trade in the 82.80 to 83.30 range next week as inflows continue and oil and RBI buy the pair’s downside.
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