India’s forex reserves hit about six-month high

India’s foreign exchange reserves rose by whopping USD 1.727 billion to USD 573.727 billion in the week ending on January 20, according to Reserve Bank of India’s latest data. The reserves hit about six-month highs with the latest two consecutive weeks’ rise, the RBI’s Weekly Statistical Supplement Bulletin said. During the week that ended on January 13, the reserves rose by USD whopping USD 10.417 billion to USD 572.0 billion, earlier data showed. According to RBI’s latest data, India’s foreign currency assets, the biggest component of the forex reserves, rose by USD 839 million to USD 506.358 billion. Gold reserves rose by USD 821 million to USD 43.712 billion. At the start of last year — 2022, the overall forex reserves were at about USD 633 billion. Much of the decline can be attributed to RBI’s intervention and a rise in the cost of imported goods. In October 2021, the country’s foreign exchange reserves reportedly touched an all-time high of about USD 645 billion. The forex reserves had been intermittently falling for months now, barring the latest jump, 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.