India’s forex reserves grow $58 bn year-to-date to $620.4 bn

India's foreign exchange reserves increased by $57.63 billion year-to-date, taking overall forex reserves with the Reserve Bank of India (RBI) to $620.44 billion, weekly data released by the central bank on 22 December 2023 show.

Forex reserves with the RBI increased by $4.47 billion in the week ended 22 December 2023 to reach $620.44 billion, even as forex inflows continued for the third consecutive week, according to RBI data.

This follows a $9.11 billion increase – the highest-ever weekly increase - in the forex kitty, which rose to $615.97 billion in the preceding week ended 15 December 2023. The country’s overall forex reserves had risen by $2.82 billion to $606.86 billion in the week before. 

India’s forex reserves had hit a record $645 billion in October 2021, which is $25 billion more than the current level.

The country’s foreign exchange reserves took a toll in the wake of the Russia-Ukraine conflict and its after effects on the global economy. RBI had to use its forex reserves to defend the rupee amidst the financial market disruption that followed.

For the week ended 22 December, foreign currency assets, which form the single largest component of the forex reserves, increased by $4.898 billion to $549.747 billion, according to RBI.

In the year so far, the monetary authority has added %51.257 billion to the foreign currency assets. 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.

However, gold reserves in the forex reserves declined by $107 million to $47.474 billion during the week ended 22 December while the special drawing rights (SDRs) were almost flat, rising by just $4 million to $18.327 billion. India’s reserve position with the International Monetary Fund (IMF) also declined by $129 million to $4.894 billion in the reporting week, data showed.