Mumbai– India’s foreign exchange reserves surged by $10.8 billion to reach $676.3 billion for the week ending April 4, according to data released Friday by the Reserve Bank of India (RBI).
This marks the fifth consecutive week of gains in the country’s forex reserves.
Foreign currency assets, the largest component of the reserves, rose by $9 billion to $574.08 billion. Gold reserves also climbed, increasing by $1.5 billion to $79.36 billion. Meanwhile, Special Drawing Rights (SDRs) grew by $186 million to $18.36 billion, the RBI’s weekly statistical supplement showed.
In the previous week ending March 28, India’s reserves had risen by $6.6 billion to a five-month high of $665.4 billion. The recent streak of increases follows a period of decline caused by currency revaluation and RBI intervention in forex markets aimed at curbing rupee volatility.
India’s forex reserves had previously touched a record high of $704.89 billion in September 2024.
A robust foreign exchange reserve position strengthens the Indian rupee against the U.S. dollar and signals strong macroeconomic fundamentals. It also provides the RBI with greater flexibility to intervene in currency markets, both spot and forward, to stabilize the rupee during periods of volatility.
Conversely, a shrinking forex reserve limits the central bank’s capacity to support the rupee in times of pressure.
Separately, India’s merchandise trade deficit narrowed to a more than three-year low of $14.05 billion in February, down from $22.99 billion in January, according to data from the Ministry of Commerce and Industry. The improvement was driven by steady exports and a decline in imports, indicating resilience in the external sector despite ongoing global economic uncertainties triggered by geopolitical tensions. (Source: IANS)
