New Delhi: The Reserve Bank of India announced on Friday that India’s foreign exchange reserves rose by USD 4.532 billion to USD 588.78 billion for the week ended April 28. The increase in forex reserves came after a drop of USD 2.164 billion to USD 584.248 billion in the previous reporting week. India’s forex reserves had reached a historic high of USD 645 billion in October 2021 but declined as the central bank deployed the funds to defend the rupee against global pressures.
Foreign currency assets, a major component of India’s forex reserves, increased by almost USD 5 billion to USD 519.485 billion for the week ended April 28, according to the Weekly Statistical Supplement released by the RBI. The foreign currency assets are expressed in dollar terms and reflect the appreciation or depreciation of non-US units like the euro, pound, and yen held in the forex reserves.
However, gold reserves fell by USD 494 million to USD 45.657 billion, as reported by the RBI. Special Drawing Rights (SDRs) were up by USD 35 million to USD 18.466 billion, while the country’s reserve position with the International Monetary Fund (IMF) fell by USD 4 million to USD 5.172 billion in the reporting week.
India’s forex reserves have been on an upward trajectory since June 2020, when they stood at USD 505.60 billion. This increase has been attributed to various factors, including higher foreign portfolio investments in India’s equity markets, a rise in remittances, and a reduction in imports due to the COVID-19 pandemic. The forex reserves provide India with a cushion to deal with external shocks and help maintain the value of the rupee against other currencies.
