Daijiworld Media Network - Mumbai

Mumbai, May 16: India’s foreign exchange reserves registered a strong rebound, rising by $6.295 billion to reach $696.988 billion for the week ended May 8, according to data released by the Reserve Bank of India on Friday.

The sharp increase was largely driven by a substantial rise in the country’s gold reserves, reversing the previous week’s decline of $7.794 billion when reserves had fallen to $690.693 billion.

India’s forex reserves had earlier climbed to an all-time high of $728.494 billion during the week ending February 27. However, heightened geopolitical tensions in the Middle East and volatility in global markets subsequently put pressure on reserves, prompting the RBI to intervene in the currency market to support the rupee.

According to the central bank, foreign currency assets (FCAs), which make up the largest share of the reserves, increased by $562 million to $552.387 billion during the reporting week.

The RBI clarified that FCAs, expressed in US dollar terms, also reflect fluctuations in the value of major international currencies such as the euro, pound sterling and Japanese yen that are held as part of India’s reserves.

Gold reserves recorded the most significant gain among all reserve components, surging by $5.637 billion to reach $120.853 billion.

Meanwhile, Special Drawing Rights (SDRs) with the International Monetary Fund rose by $84 million to $18.873 billion during the week.

India’s reserve position with the IMF also edged higher by $12 million to $4.875 billion, the RBI data showed.

The movement in India’s forex reserves over recent months reflects the central bank’s efforts to manage external economic pressures, stabilise the domestic currency and maintain adequate liquidity buffers amid uncertain global conditions.