Mumbai: India’s foreign exchange reserves rebounded sharply in the first week of April, reversing the previous week’s decline, as the country’s forex reserves rose by $9.063 billion, according to data released by the Reserve Bank of India (RBI) on Friday.
The country’s forex jumped to $697.121 billion for the week ended April 3. This comes after a significant drop of $10.288 billion in the preceding week ended March 27, when reserves had slipped to $688.058 billion.
The latest increase was driven by gains across key components of the reserve basket. Gold reserves recorded a sharp rise of $7.221 billion, taking their total value to $120.742 billion.
Foreign currency assets (FCA), the largest component of the reserves, also increased by $1.784 billion to $552.856 billion, according to the central bank’s data.
FCA includes assets denominated in major global currencies such as the US dollar, euro, yen and pound, with values expressed in dollar terms.
Additionally, special drawing rights (SDRs) saw a marginal increase of $58 million to $18.707 billion during the week.
India’s reserve position with the International Monetary Fund remained unchanged at $4.816 billion.
Despite the recent volatility, India’s forex reserves remain below their all-time high of $728.494 billion, which was recorded in the week ended February 27, before the onset of the West Asia crisis that triggered a phase of depletion.
Foreign exchange reserves play a crucial role in maintaining economic stability, helping the central bank manage currency fluctuations and ensuring smooth external trade.
A robust reserve position allows the RBI to intervene in the currency market to support the rupee during periods of volatility, while also reflecting sustained inflows of foreign currency into the economy.
Meanwhile, in the week ended February 27, India’s foreign exchange reserves surged by $4.885 billion to an all-time high of $728.494 billion, according to RBI earlier data.
(IANS)
