India's Forex reserves soar to $616.7 billion, shows RBI data

India's foreign exchange reserves witnessed an increase of $591 million, reaching a total of $616.73 billion for the week ending January 26,the latest data by Reserve Bank of India (RBI) showed on Friday.Previously, forex reserves witnessed a dip of $2.79 billion, dragging the reserves to $618.94 billion, for the week ended on January 19, 2024.
According to estimates, the country's forex kitty had reached an all-time high of USD 645 billion,in October 2021.The reserves have been declining as the central bank deploys the kitty to defend the rupee amid pressures caused majorly by global developments.Typically, the RBI, from time to time, intervenes in the market through liquidity management, including through the selling of dollars, with a view to preventing a steep depreciation in the rupee.
India's reserve position with the IMF was up USD 6 million to USD 4.86 billion in the reporting week, according to the recent  RBI's data. Analysts believe that the sustained increase in forex reserves will further boost investor confidence, both domestically and internationally. The ample reserves also equip the RBI with the necessary tools to intervene in the foreign exchange market if needed, ensuring stability in currency markets.

(Ira Singh, Asstt Editor, Gandhinagar)