In the preceding week, the country’s forex reserves had risen by reserves rose by $7.26 billion to $674.19 billion, reversing the decline recorded in the previous week.
The latest RBI data showed that foreign currency assets (FCAs), the largest component of the country’s forex reserves, increased by $930 million to $546.51 billion during the reporting week. FCAs reflect the impact of fluctuations in the value of major non-US currencies such as the euro, pound sterling and Japanese yen against the US dollar.
India’s gold reserves also recorded an increase, rising by $24 million to $105.23 billion.
Meanwhile, the country’s Special Drawing Rights (SDRs) with the International Monetary Fund (IMF) increased by $3 million to $18.626 billion, while India’s reserve tranche position with the IMF edged up by $7 million to $4.793 billion.
Earlier this year, India’s reserves had touched a record high of $728.494 billion during the week ended February 27. However, escalating tensions in the Middle East triggered sustained pressure on the rupee, prompting the RBI to intervene in the foreign exchange market through dollar sales, which contributed to a decline in reserves over subsequent weeks.
Amid the external uncertainties, Prime Minister Narendra Modi has, since May 11, repeatedly urged citizens to help conserve foreign exchange by reducing non-essential overseas travel, cutting fuel consumption and postponing gold purchases for a year.
The RBI has reiterated that it remains vigilant over developments in the foreign exchange market and will intervene whenever necessary to ensure orderly market conditions, while maintaining that it does not target any specific exchange rate.