Daijiworld Media Network - Mumbai

Mumbai, Jul 31: India's foreign exchange reserves increased by $6.118 billion to $682.235 billion for the week ended July 24, extending their recent upward trend, according to data released by the Reserve Bank of India (RBI) on Friday.

The latest rise follows a gain of $1.08 billion in the previous reporting week ended July 17, when the country's forex reserves stood at $676.237 billion.

The RBI data showed that gold reserves rose by $1.308 billion during the week to $103.058 billion.

Foreign currency assets (FCAs), the largest component of India's forex reserves, increased by $4.873 billion to $555.929 billion during the period.

The RBI said FCAs, expressed in dollar terms, reflect the impact of appreciation or depreciation of non-US currencies such as the euro, pound and yen held in the reserves.

However, the country's Special Drawing Rights (SDRs) declined by $53 million to $18.617 billion during the week.

The RBI's weekly statistical supplement indicated that India's forex reserves have continued to recover after witnessing declines earlier this year amid global economic uncertainties.

India's foreign exchange reserves had touched a record high of $728.494 billion in the week ended February 27. However, rising tensions in West Asia later exerted pressure on the rupee, leading the RBI to intervene in the foreign exchange market through dollar sales, resulting in a moderation in reserves in subsequent weeks.

The central bank has repeatedly stated that it closely monitors developments in the forex market and intervenes only to contain excessive volatility and maintain orderly market conditions, without targeting any particular exchange rate.

A strong forex reserve position improves India's ability to meet external payment obligations, support imports and provide a cushion against global financial and geopolitical uncertainties.