India’s foreign exchange reserves hit record high at $642.29 billion

Foreign exchange reserves are assets held by a country’s central bank or monetary authority.

New Delhi:

The latest data released by the Reserve Bank of India (RBI) showed that India’s foreign exchange reserves increased for the fourth consecutive week in the week ended March 15, reaching a record high of $642.292 billion. Foreign exchange transactions increased by $6.396 billion during the week.

In the week ended March 8, foreign exchange reserves increased by US$10.470 billion to US$636.095 billion.

Weekly statistics from the Reserve Bank of India show that in the latest week, foreign currency assets (FCA), the largest component of India’s foreign exchange reserves, increased by US$6.034 billion to US$568.386 billion.

Gold reserves increased by US$425 million this week to US$51.140 billion.

In 2023, the Reserve Bank of India’s foreign exchange reserves increased by approximately $58 billion. In 2022, India’s foreign exchange dropped by a total of US$71 billion.

Foreign exchange reserves, or FX Reserve, are assets held by a country’s central bank or monetary authority.

It is usually held in a reserve currency, usually the US dollar, followed by the euro, yen and pound.

In October 2021, the country’s foreign exchange reserves last hit a record high. The decline since then can largely be attributed to rising costs of imported goods in 2022.

Furthermore, the relative decline in foreign exchange reserves may be related to the RBI’s intervention in the market from time to time to prevent uneven depreciation of the rupee against the US dollar.

Typically, the Reserve Bank of India intervenes in the market from time to time through liquidity management, including selling dollars, to prevent the rupee from depreciating sharply.

The Reserve Bank of India monitors the foreign exchange market closely and intervenes only to maintain orderly market conditions by curbing excessive exchange rate fluctuations without reference to any pre-determined target levels or bands.

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