Daijiworld Media Network - Mumbai
Mumbai, Jul 24: India's foreign exchange reserves increased by $1.08 billion to $676.237 billion for the week ended July 17, continuing their upward trajectory, according to data released by the Reserve Bank of India (RBI) on Friday.
The latest rise follows an increase of $964 million in the previous week, when the country's reserves had climbed to $675.157 billion.
The RBI's weekly statistical supplement showed that the reserve position has continued to improve after recovering from the decline witnessed earlier this year amid heightened global economic uncertainty.
India's foreign exchange reserves had touched a record high of $728.494 billion during the week ended February 27.
During the latest reporting week, foreign currency assets (FCAs), the largest component of the reserves, increased by $4.549 billion to $551.057 billion.
The RBI noted that foreign currency assets, expressed in US dollar terms, also reflect changes in the value of non-dollar currencies such as the euro, pound sterling and Japanese yen held in the country's reserve portfolio.
In contrast, the value of gold reserves declined by $3.48 billion to $101.749 billion during the week.
India's Special Drawing Rights (SDRs) with the International Monetary Fund (IMF) increased by $44 million to $18.67 billion, according to the central bank.
The RBI said the country's foreign exchange reserves comprise foreign currency assets, gold reserves, SDRs and the reserve tranche position with the IMF, all of which serve as an important safeguard against external economic shocks and help maintain stability in the rupee.
Earlier this year, escalating geopolitical tensions in the Middle East had exerted pressure on the Indian currency, prompting the RBI to intervene in the foreign exchange market through dollar sales to contain excessive volatility. Those interventions had temporarily moderated the reserve position.
The central bank has consistently maintained that its interventions in the forex market are aimed solely at ensuring orderly market conditions and curbing excessive volatility, rather than targeting any specific exchange rate.
A robust foreign exchange reserve position strengthens India's ability to meet external payment obligations, finance imports and shield the economy from global financial and geopolitical disruptions.