MUMBAI (Reuters) – India’s foreign exchange reserves rose for the first time in nine weeks and stood at $658.09 billion as of Nov. 29, coming off five-month lows, data from the Reserve Bank of India showed on Friday.
The reserves rose by $1.5 billion in the reported week. They had dropped by $48.3 billion cumulatively in the last eight weeks.
Changes in foreign currency assets are caused by the central bank’s intervention in the forex market as well as the appreciation or depreciation of foreign assets held in the reserves.
The RBI intervenes on both sides of the forex market to curb undue volatility in the rupee.
The rupee has largely remained under pressure over the last two months on the back of heightened foreign portfolio outflows and a wave of dollar strength sparked by Donald Trump’s victory in the U.S. presidential election.
The RBI’s “central tenet” is to maintain orderliness and stability in the exchange rate, without compromising market efficiency, Shaktikanta Das, the central bank’s governor, said on Friday.
“Foreign exchange reserves are deployed judiciously to mitigate undue volatility, maintain market confidence, anchor expectations and preserve overall financial stability,” Das said, adding that the current level of reserves are “quite robust.”
In the week for which the forex reserves data pertains, the rupee had declined marginally against the dollar.
The currency ended at 84.6875 on Friday and logged a fifth consecutive weekly fall, declining 0.2%. It had hit a record low of 84.7575 during this week.
The forex reserves also include India’s reserve tranche position in the International Monetary Fund.
FOREIGN EXCHANGE RESERVES (in million U.S. dollars)
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Nov 29 Nov 22
2024 2024
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Foreign currency assets 568,852 566,791
Gold 66,979 67,573
SDRs 18,007 17,985
Reserve Tranche Position 4,254 4,232
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Total 658,091 656,582
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Source text: (https://www.rbi.org.in/scripts/BS_PressReleaseDisplay.aspx)
(Reporting by Siddhi Nayak; Editing by Maju Samuel)
