Forex Update: India’s Foreign Exchange Reserves Rise $591 Million to $616.7 Billion

India’s forex reserves increased $591 million to $616.733 billion for the week ended January 26, according to the latest RBI data. In the previous reporting week, the overall reserves had dropped $2.795 billion to $616.143 billion.

The country’s forex kitty had reached an all-time high of $645 billion in October 2021. The reserves took a hit as the central bank deployed the kitty to defend the rupee amid pressures caused majorly by global developments since last year.

For the week ended January 26, the foreign currency assets, a major component of the reserves, increased $289 million to $546.144 billion, the data said.

Expressed in dollar terms, the foreign currency assets include the effect of appreciation or depreciation of non-US units like the euro, pound, and yen held in the foreign exchange reserves.

Gold reserves increased $269 million to $47.481 billion during the week, the RBI said. The special drawing rights (SDRs) were up $27 million to $18.248 billion, the apex bank said.

India’s reserve position with the IMF was up $6 million to $4.86 billion in the reporting week, the RBI’s data showed.

The rupee during the week ended February 2

Dollar inflows into the Indian rupee have allowed the currency to gain substantially during the week ended February 2 as it rose from a low of 83.1550 to high of 82.82. The RBI has been buying dollars at 82.82 which has taken the rupee to 82.93.

“The rupee is expected to keep gaining due to inflows but RBI may restrict the gains and keep buying dollars in the coming week. The range could be 82.70 to 83.20,” Anil Kumar Bhansali, head (treasury) and executive director of Finrex Treasury Advisors LLP, said.

(With Inputs from Agencies)