India's forex reserves rise by $1.85 billion to $595.05 billion; foreign currency assets at $527.9 billion | Mint
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Business News/ Markets / India's forex reserves rise by $1.85 billion to $595.05 billion; foreign currency assets at $527.9 billion
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India's forex reserves rise by $1.85 billion to $595.05 billion; foreign currency assets at $527.9 billion

For the week ended on June 30, the foreign currency assets, a major component of the reserves, increased by $2.539 billion to $527.979 billion, according to the Weekly Statistical Supplement released by the RBI on Friday.

India's overall foreign exchange (forex) reserves dropped by $2.901 billion to $593.198 billion in the previous reporting week. (REUTERS)Premium
India's overall foreign exchange (forex) reserves dropped by $2.901 billion to $593.198 billion in the previous reporting week. (REUTERS)

India's foreign exchange reserves rose by $1.853 billion to $595.051 billion in the week ended on June 30, said the Reserve Bank of India (RBI). The overall reserve had dropped by $2.901 billion to $593.198 billion in the previous reporting week.

In October 2021, the country's forex reserve had reached an all-time high of $645 billion. The reserves have been declining as the central bank deploys the kitty to defend the rupee amid pressures caused majorly by global developments.

Also Read: RBI panel sets global road map for rupee

For the week ended on June 30, the foreign currency assets, a major component of the reserves, increased by $2.539 billion to $527.979 billion, according to the Weekly Statistical Supplement released by the RBI on Friday.

Expressed in dollar terms, the foreign currency assets include the effect of appreciation or depreciation of non-US units like the euro, pound and yen held in the foreign exchange reserves.

Gold reserves dropped by $472 million to $43.832 billion, the RBI said. The special drawing rights (SDRs) were down by $95 million to $18.239 billion, according to RBI data. The country's reserve position with the International Monetary Fund (IMF) was down by $118 million to $5.002 billion in the reporting week, as per RBI data.

Earlier this week, an RBI-appointed committee recommended a roadmap to achieve internationalisation of rupee including efforts for inclusion in the IMF's SDR basket. 

The inter-departmental group headed by RBI executive director RS Ratho in its report said the rupee has the potential to become an international currency as India is one of the fastest growing economies and has shown resilience in the face of major headwinds. The higher use of rupee in invoicing and settlement of international trade, as well as in capital account transactions, will give it a progressively international presence, it said.

On July 7, the rupee depreciated 23 paise to close at a six-week low against the US dollar - logging its worst in seven weeks, following losses in Asian currencies amid worries over more interest rate hikes by Federal Reserve. The local unit ended at 82.74 per dollar, compared to previous close of 82.51, after hitting its lowest level since May 30 earlier in the session at 82.75.

The currency also logged its fourth straight session of losses. For the week, the rupee fell 0.8 per cent, its biggest weekly decline since May 19.

Market participants are considering the negative impact of upcoming interest rate hikes, along with the strength of the US dollar and rising crude prices supported by OPEC cuts, which are contributing to the weakness in the rupee. 

‘’The strength in the Indian capital market helped limit the rupee's fall, but there was profit booking observed in broad market indices today, adding further pressure on the rupee. Support for the rupee is now expected around 82.90-83.00, which may provide some relief from the depreciation,'' said Jateen Trivedi, VP Research Analyst at LKP Securities.

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Published: 07 Jul 2023, 07:00 PM IST
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