India's foreign exchange reserves have been on an upward trajectory, marking the fifth consecutive week of growth and reaching a 20-month high of $615.97 billion as of December 15, according to data released by the RBI.
The significant increase of $9.11 billion in reserves for the week ending December 15 follows a rise of $2.82 billion to $606.86 billion in the previous week ending December 8. Earlier, in the week ending December 1, reserves had surged by $6.1 billion to reach a four-month high of $604.04 billion.
Growing foreign exchange reserves strengthen the country's macroeconomic fundamentals and provide the RBI with leverage to stabilize the rupee in cases of volatility. The RBI typically intervenes in currency markets by injecting more dollars to prevent the rupee from drastic depreciation during periods of pressure.
Maintaining healthy reserves gives the RBI sufficient capacity to manage currency fluctuations and prevents the rupee from experiencing sharp declines, ensuring stability in the forex market.
(With Agency Inputs)
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