India's foreign exchange reserves recorded a sharp rise of $15.267 billion to $653.966 billion for the week ended March 7, as per Reserve Bank of India (RBI) data. This is the steepest weekly rise in over two years.
The increase follows after the reserves had decreased by $1.781 billion in the prior week, to $638.698 billion. India's forex reserves had been pressured over the last few months due to RBI intervention in the market to contain rupee volatility, as well as valuation adjustments.
The reserves had reached an all-time high of $704.885 billion in late September 2024 at their highest point.
Key Factors Behind the Surge
The $15.267 billion increase is mostly due to the $10 billion forex swap by the RBI on February 28, under which the central bank bought US dollars in exchange for rupees to infuse liquidity into the financial system.
Composition of Reserve Components
Foreign Currency Assets (FCA) – The biggest segment of forex reserves increased by $13.993 billion to $557.282 billion. These assets are affected by the fluctuation of major world currencies such as the euro, pound, and yen against the US dollar.
- Gold Reserves – Decreased by $1.053 billion to $74.325 billion.
- Special Drawing Rights (SDRs) – Increased by $212 million to $18.21 billion.
- IMF Reserve Position – Down by $69 million, at $4.148 billion.
Read also| Indian Real Estate Developers Unlock ₹62,000 Crore Investment Opportunity: Report
