India’s Forex Reserves Rise By $1.48 Billion To $695.10 Billion

India’s foreign exchange reserves rose by $1.48 billion to reach $695.10 billion for the week ending 15 August, according to data released by the Reserve Bank of India (RBI) on Friday.

Foreign currency assets, the largest component of reserves, registered a sharp rise of $1.92 billion, taking the total to $585.90 billion.

Expressed in US dollar terms, these assets reflect the impact of movements in non-dollar currencies such as the euro, pound and yen.

India’s forex reserves had earlier touched a record high of $704.885 billion at the end of September 2024, before moderating in the subsequent months.

While foreign currency assets strengthened, gold reserves witnessed a decline. The RBI reported that gold holdings fell by $2.16 billion to $86.16 billion during the week.

The reserve position with the International Monetary Fund (IMF), however, recorded a marginal rise of $15 million, standing at $4.75 billion.

RBI’s Market Interventions

The central bank continues to monitor foreign exchange markets closely. From time to time, it intervenes through liquidity management measures, including the selling of dollars, to prevent sharp fluctuations in the rupee.

The RBI emphasised that its interventions are designed only to maintain orderly market conditions by containing excessive volatility in exchange rates, without targeting any specific level or band.

Forex reserves play a crucial role in maintaining financial stability, covering imports, and providing a buffer against external shocks. The latest increase underscores India’s resilience in managing global uncertainties and currency market fluctuations.

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