India's foreign reserves increased for the fifth week in a row
India's foreign currency assets, which make up the largest portion of the foreign exchange reserves, increased by USD 3.14 billion to USD 500.12 billion, according to the most recent statistics from the RBI.
According to figures from the Reserve Bank of India, India's foreign exchange reserves increased by USD 2.91 billion to USD 564.07 billion during the week ending December 9.
Notably, India's foreign exchange reserves have increased for five weeks running. The nation's foreign exchange holdings were worth USD 561.16 billion during the week that ended December 2. India's foreign currency assets, which make up the largest portion of the foreign exchange reserves, increased by USD 3.14 billion to USD 500.12 billion, according to the most recent statistics from the RBI.
However, during the most recent week, gold reserves fell by USD 296 million to USD 40.729 billion.
The total amount of foreign exchange reserves was USD 633.61 billion at the beginning of 2022.
With the exception of those five atypical weeks, the forex reserves have been sporadically declining for months, partly as a result of market interventions by the RBI to protect the weakening rupee from an advancing US dollar.
Since Russia's invasion of Ukraine in late February, when imports of energy and other commodities became more expensive globally and a greater need for reserves for trade settlement arose, India's foreign exchange reserves have fallen precipitously.
In order to stop a sharp depreciation of the rupee, the RBI often occasionally intervenes in the market through liquidity management, including by selling dollars.
According to Nirmala Sitharaman, the Union finance minister, the RBI's defence of the rupee operations have generated net sales of USD 33.42 billion through September 2022.In response to a query regarding whether the RBI has used foreign exchange reserves to stop the depreciation of the Indian rupee, Sitharaman gave her response.
"Without taking into account any pre-established target level or band, the Reserve Bank of India (RBI) regularly monitors the foreign exchange markets and only intervenes to prevent undue volatility in the exchange rate and preserve orderly market conditions. The RBI's operations during the fiscal year have generated net revenues of USD 33.42 billion to September 2022 (settlement basis), "According to Sitharaman's written response.
What's Your Reaction?
