Photo: Reuters
Photo: Reuters

India’s forex reserves swells by $2.68 billion to $396 billion

The overall reserves had increased by $116.4 million to $393.404 billion in the previous reporting week

Mumbai: The country’s foreign exchange reserves jumped by $2.68 billion -- one of the largest increases in recent months -- to touch $396.084 billion in the week to January 4, driven by a rise in core currency assets and gold holdings, RBI data showed Friday.

The overall reserves had increased by $116.4 million to $393.404 billion in the previous reporting week.

In the reporting week, foreign currency assets, a major component of the overall reserves, rose by $2.215 billion to $370.292 billion.

Expressed in US dollars, forex assets include the effect of appreciation or depreciation of non-US currencies such as the euro, pound and yen held in the reserves.

The reserves had touched a record high of $426.028 billion in the week to April 13, 2018. Since then, the forex kitty has been fluctuating and mostly sliding.

One of the major reasons for the decline is that the central bank has been selling dollars in the market to contain rupee volatility. In the first five months of the current fiscal, the central bank has sold more than $34 billion to arrest the fall of the rupee, which had sniffed at 74 to a greenback earlier this fiscal.

The value of the gold reserves increased by $465.5 million to $21.689 billion in the reporting week, the apex bank said.

It can be noted that the RBI has been buying bullion after almost a decade. During its fiscal year ending June 2018, the RBI had added 8.46 metric tonnes of gold. The central bank now holds total 566.23 tonnes of the yellow metal.

The purchase was made to diversify the foreign currency assets, the RBI had said in its annual report.

However, the week saw the special drawing rights with the International Monetary Fund marginally decreasing by $0.1 million to $1.462.6 billion.

The country’s reserve position with the IMF also declined marginally by $0.1 million to $2.639 billion, the apex bank said.

(This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed)

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