Mumbai– India’s foreign exchange reserves continued their upward momentum for a sixth straight week, climbing by $1.57 billion to reach $677.84 billion for the week ending April 11, according to data released by the Reserve Bank of India (RBI) on Friday.
This follows a sharp $10.8 billion increase the previous week, when reserves touched $676.3 billion as of April 4. The sustained rise marks a reversal of earlier declines caused by currency revaluation and RBI interventions aimed at curbing rupee volatility.
Foreign currency assets, the largest component of the reserves, rose by $892 million to $574.98 billion during the latest week. These assets are expressed in U.S. dollars and account for fluctuations in the value of other major currencies such as the euro, pound sterling, and yen.
The gold component of India’s reserves also saw a notable jump, increasing by $638 million to $79.997 billion. Central banks globally, including the RBI, have been bolstering gold holdings amid rising geopolitical and economic uncertainties, viewing the precious metal as a safe-haven asset.
Special Drawing Rights (SDRs) declined slightly by $6 million to $18.356 billion, while India’s reserve position with the International Monetary Fund (IMF) rose by $43 million to $4.502 billion.
India’s forex reserves had previously reached an all-time high of $704.885 billion in September 2024. A strong forex buffer not only reflects the robust fundamentals of the Indian economy but also enhances the RBI’s capacity to stabilize the rupee during periods of market volatility.
Higher reserves provide the RBI with greater flexibility to intervene in both spot and forward currency markets, helping to prevent sharp depreciation of the rupee. Conversely, a falling reserve pool limits the central bank’s ability to shield the domestic currency.
Meanwhile, signs of broader economic resilience are emerging. India’s merchandise trade deficit narrowed to a 3-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 came as exports remained stable while imports declined, further strengthening India’s external position amid continued global uncertainty. (Source: IANS)
