India’s forex reserves rise $3.51 billion to $694.2 billion

India’s foreign exchange reserves climbed by $3.51 billion to $694.2 billion for the week ending August 29, according to the latest data released by the Reserve Bank of India (RBI) on Friday. The increase comes after a sharp fall of $4.38 billion in the previous week, when reserves had declined to $690.72 billion,according to information.
During the reporting week, foreign currency assets (FCAs)  the largest component of the reserves rose by $1.68 billion to $583.94 billion. In dollar terms, FCAs also reflect the impact of movements in non-U.S. currencies such as the euro, pound, and yen held in the reserves.The RBI data further showed that gold reserves surged by $1.76 billion, reaching $86.76 billion. Meanwhile, Special Drawing Rights (SDRs) with the International Monetary Fund (IMF) increased by $40 million to $18.77 billion. India’s reserve position with the IMF also inched up by $18 million to $4.74 billion.
The central bank frequently intervenes in the forex market through liquidity operations including the sale and purchase of dollars  to limit sharp swings in the rupee. Officials have reiterated that such interventions are aimed at ensuring orderly market conditions rather than defending any particular level of the domestic currency.India’s rising reserves provide a support against external shocks, strengthen the country’s ability to finance imports, and help manage currency volatility amid global uncertainties.

(Business Correspondent)