India’s Forex Reserves Rise by $1.51 Billion to $658.091 Billion
India’s foreign exchange (forex) reserves recorded a rise of $1.51 billion for the week ending November 29, reaching $658.091 billion, according to data released by the Reserve Bank of India (RBI) on Friday. This marks a recovery after consecutive weeks of decline, including a significant $17.761 billion drop earlier in November.
Foreign Currency Assets Lead the Recovery
The increase was primarily driven by a rise in foreign currency assets (FCA), the largest component of forex reserves, which grew by $2.061 billion to reach $568.852 billion. Foreign currency assets, expressed in US dollar terms, account for the valuation effects of non-US currencies such as the euro, pound, and yen held in the reserves.
Gold and IMF Contributions
However, gold reserves declined by $595 million, bringing their value to $66.979 billion. In contrast, Special Drawing Rights (SDRs), an international reserve asset allocated by the International Monetary Fund (IMF), rose by $22 million to $18.007 billion. India’s reserve position with the IMF also increased by $22 million, reaching $4.254 billion.
Reserves After Previous Declines
The uptick comes after the reserves had dropped by $1.31 billion to $656.582 billion in the previous reporting week, following a substantial $17.761 billion dip the week before. India’s forex reserves had reached an all-time high of $704.885 billion in September 2021 but have been fluctuating since, influenced by global economic factors and currency valuation adjustments.
Stabilizing Amid Global Volatility
The latest rise in reserves reflects improving stability amidst global economic uncertainties. As forex reserves act as a buffer for currency volatility and external shocks, this recovery is a positive sign for India’s economic resilience and monetary policy objectives.
The Reserve Bank’s active management of forex reserves continues to support the country’s economic objectives, ensuring financial stability in a dynamic global environment.
