Foreign Currency Assets Climb, Gold Reserves Drop Slightly
India’s foreign exchange reserves saw a strong rise for the week ending June 27, going up by $4.8 billion to reach a total of $702.78 billion, according to new data shared by the Reserve Bank of India (RBI) on Friday.
Reserves Recover After a Fall
The previous week, on June 20, the reserves were at $697.93 billion, which was a drop of $1.02 billion from the week before that. Now, with this week’s increase, India is once again close to its all-time high of $704.885 billion, which was recorded in late September 2024.
Breakdown of the Reserves
- Foreign currency assets, the biggest part of the reserves, rose by $5.75 billion, reaching $594.82 billion.
- These assets include the effect of changes in the value of other currencies like the euro, pound, and yen, when converted to US dollars.
- Gold reserves saw a decrease of $1.23 billion, bringing the total to $84.5 billion.
- Special Drawing Rights (SDRs) went up by $158 million, now standing at $18.83 billion.
How the RBI Manages the Rupee
The RBI steps into the foreign exchange market from time to time to handle sharp movements in the rupee’s value. One way it does this is by selling US dollars to keep the exchange rate from fluctuating too much.
The central bank says its goal is not to keep the rupee at a fixed level but to avoid sudden and extreme changes. It monitors the market closely and acts only when needed to keep things stable.