India’s Forex Reserves Inch Closer to the $700 Billion Milestone

India’s foreign exchange reserves registered a strong rebound in the week ended May 8, rising by $6.295 billion to reach $696.988 billion, according to data released by the Reserve Bank of India (RBI) on Friday.

This increase comes after a decline of $7.794 billion in the previous week, when the reserves had fallen to $690.693 billion. Earlier this year, India’s forex reserves had touched a record high of $728.494 billion in the week ended February 27. Subsequently, reserves moderated as the RBI stepped into the currency market by selling dollars to support the rupee amid volatility triggered by geopolitical tensions in West Asia.

Foreign currency assets (FCAs), which form the largest portion of the country’s reserves, edged up by $562 million to $552.387 billion during the reporting week. These assets are measured in US dollar terms and reflect the impact of fluctuations in other reserve currencies such as the euro, pound sterling, and Japanese yen.

Gold reserves saw a substantial increase, climbing by $5.637 billion to $120.853 billion. In addition, Special Drawing Rights (SDRs) with the International Monetary Fund rose by $84 million to $18.873 billion.

India’s reserve tranche position with the IMF also recorded a modest gain of $12 million, reaching $4.875 billion by the end of the week.