Snapping a two-week falling streak, India's foreign exchange reserves saw a rise of $5.929 billion and stood at $595.067 billion as on June 2, 2023, as per Reserve Bank of India data updated Friday.
India's forex reserves hit a one-month low as they declined $4.339 billion to $589.138 billion in the week that ended on May 26, 2023.
India's foreign currency assets, the biggest component of the forex reserves, rose by $5.270 billion to $526.201 billion. The changes in foreign currency assets, expressed in dollar terms, include the effects of appreciation or depreciation of other currencies held in the RBI's reserves.
India's gold reserves rose by $655 million, taking the overall levels to $45.557 billion. Meanwhile, SDRs fell by $6 million, to $18.186 billion.
India's reserve position in the IMF improved by $10 million to $5.123 billion.
The rupee ended at 82.4625 to the U.S. dollar, compared with 82.5625 in the previous session. The rupee snapped a two-week winning streak, dropping 0.19% this week. The rupee traded between 82.42 and 82.68 for the week.
In October 2021, the country's foreign exchange reserves touched an all-time high of about USD 645 billion. Much of the decline since then can be attributed to a rise in the cost of imported goods in 2022.
Also, the forex reserves had fallen largely because of the RBI's intervention in the market to defend the depreciating rupee against a surging US dollar. 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.
The RBI closely monitors the foreign exchange markets and intervenes only to maintain orderly market conditions by containing excessive volatility in the exchange rate, without reference to any pre-determined target level or band.
Source Name:Economic Times