Due to the RBI’s intervention in the market, the foreign exchange reserves had fallen to a great extent.
New Delhi:
India’s foreign exchange reserves continue to rise and touch the highest level in almost a year, inching towards USD 600 billion. In the week ended May 12, for which data is available, the reserves increased by US$ 3.553 billion to US$ 599.529 billion.
Before May 12, they increased by USD 7.196 billion to USD 595.976 billion, the RBI data showed.
Coming back to the latest RBI data, India’s foreign currency assets, the largest component of foreign exchange reserves, increased by USD 3.577 billion to USD 529.598 billion.
Gold reserves rose by $38 million to $46.353 billion during the latest week.
In October 2021, the country’s foreign exchange reserves touched an all-time high of around USD 645 billion.
Much of the decline since then can be attributed to an increase in the cost of imported goods in 2022.
In addition, foreign exchange reserves had dropped substantially, as the Reserve Bank of India’s intervention in the market had hedged the rupee’s fall against the rising US dollar.
Typically, the Reserve Bank of India intervenes from time to time in the market through liquidity management, which includes selling dollars, with a view to arresting the steep depreciation in the rupee.
The Reserve Bank of India closely monitors the foreign exchange markets and intervenes only to maintain orderly market conditions by controlling excessive volatility in the exchange rate, without reference to any pre-determined target level or band.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)