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India’s Forex Reserves Reach Record High of $642.631 Billion, RBI Data Shows

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India's Forex Reserves Reach Record High of $642.631 Billion, RBI Data Shows

(CTN News) – According to the most recent data from the Reserve Bank of India (RBI), India’s Forex Reserves India’s foreign exchange reserves increased for the fifth consecutive week, reaching a new all-time high of $642.631 billion in the week ending March 22.

The reserves rose by $139 million during the reporting week. Gold reserves increased by $347 million this week to $51.487 billion.

According to the central bank’s weekly statistical data, India’s foreign currency assets (FCA), the largest component of its FX reserves, fell by $123 million to $568.264 billion.

Before the week ending March 22, the foreign exchange kitty increased by $6.396 billion. In 2023, the RBI increased its foreign exchange reserves by around $58 billion. In 2022, India’s currency reserves fell by $71 billion altogether.

In October 2021, the country’s foreign exchange reserves reached an all-time high. Much of the reduction since then can be ascribed to an increase in the cost of imported goods in 2022.

A country’s central bank or monetary authority maintains forex reserves. It is typically stored in reserve currencies such as the US dollar and, to a lesser extent, the euro, Japanese yen, and pound sterling.

Changes in foreign currency assets, stated in dollars, include the impact of the appreciation or depreciation of other currencies held in the reserves. Forex reserves include India’s Reserve Tranche position with the International Monetary Fund.

Also, the relative decline in forex reserves could be attributed to the RBI’s occasional market intervention to safeguard the rupee’s uneven depreciation against a surging US dollar.

The RBI often intervenes in the market periodically. Liquidity management, including the sale of dollars, would be implemented to avoid a sharp devaluation of the rupee.

The RBI regularly monitors foreign exchange markets and intervenes only to keep market conditions stable by reducing excessive volatility in the rupee without regard for any predetermined target level or range. On Thursday, the native currency finished at 83.40 against the dollar. The Indian financial markets were closed on Friday for a holiday.

SEE ALSO: India’s Forex Reserves Dip to $583.53 Billion as RBI Defends Rupee

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